By Robbie Butler

Last week our paper Bonus Incentives and Team Effort Levels: Evidence from the ‘Field’ was accepted for publication in the Scottish Journal of Political Economy (SJPE). The SJPE has a long association with sports economics and published the first paper in Europe on sports economics in 1971 - Peter Sloane's examination of the labour market in football.

Our paper, co-authored with Liam Lenten (La Trobe) and Pat Massey (Compecon), explores the effect of bonus incentive mechanisms with a focus on how such a scheme influences aggregate production levels of teams of workers. What better place to do this than in the highly competitive setting of professional sport. 

Using data from European rugby's Heinken Cup from 1996 to 2014 we explore that the introduction of bonus points for the 2003/4 competition, and all years that followed, influenced the number of tries scored.

The modelling results demonstrate qualified evidence that introducing bonuses encouraged teams to score more tries, incentivised teams to increase effort to earn the bonus, and without reducing production after the bonus is achieved.

The paper should be available in the coming months in SJPE.

By Robbie Butler

The 18th of January 2003. That was the date. Munster versus Gloucester in the final pool game of the 2002-03 Heineken Cup - rugby unions' European Cup. 

For many reasons today, this seems like a lifetime ago. For one thing, the old Thomond Park was packed to the rafters with 12,500 people. No social distancing.

​The tale of the game is one that has never been forgot and demonstrates the power of incentives and the importance of bonuses for increased production (winning and losing bonus points) in today's game. What happened that day is testament to economic theory and has gone down in Munster folklore as the "Miracle Match". 

​Going into the final game Pool 2 looked like this. 

With Perpignan set to face Italian side Arix Viadana, it was accepted that Munster would have to beat the brilliant English side Gloucester to have any chance of progressing. If both of these things happen, all three teams would then end up on 8 points. 

Munster remarkably won the game 33-6, scoring four tries in the process. A winning margin of 27 thanks to Ronan O’Gara’s last second conversion. So too did Perpignan, meaning a three-way tie at the top. Munster's winning margin and method are crucial in the miracle. Here is why.

Before kick-off Munster knew that they would need at least a 27 point winning margin AND four tries to progress. This was a time before bonus points so no extra point was given for scoring four. There are a number of interesting article online that overview the match, and the winning combination needed for this miracle to happen, but none that I could find explained why this was needed. 

I was lucky enough to have a contact to a player that played a starring role for Munster on the day. He admitted to knowing what was needed (27 points winning margin and 4 tries) but not knowing why. With his help and those in Munster Rugby I was guided towards the tie-breaking rules. I could figure out the rest.

So here is why the Munster Miracle was a minimum margin of 27 points and at least 4 tries.

The rules dictated that in the event of a three-way tie like this, the next criteria used to separate the teams would not be points difference but tries scored. And not just tries scored, but tries scored excluding the games against the Italian team. 

Before the final pool game, head to head tries scored read:
 
Tries Scored (Before Last Game)
Perpignan = 10
​Munster = 5
Gloucester = 9
 
With Gloucester on 9, this is why Munster needed at least 4 tries. If Gloucester were to score a try in the game against Munster, the Irish team would have needed 5 tries in that game (total of 10). This of course would have had them level with Perpignan, with the French club stuck on 10.

Munster managed to get 4 tries which got them level with Gloucester, as the English club were held try-less. So, at the end of the final pool game, with all three teams on 8 points, the criteria for tie-breaker (Head-to-Head tries scored) read:
 
Tries Scored (After Last Game)
Perpignan = 10
Munster = 9
Gloucester = 9

As a result, Perpignan topped the Pool and qualified for the knock-out stages. This was not the end for Munster, as they could be one of the two best second placed teams to qualify from the pool stages. This was decided by points difference across all six pools.
 
To separate Munster and Gloucester, tie-breaker criteria two was Head-to-Head on points difference, but across all three teams. Before the last Pool game this read:

With Munster on -25 and Gloucester on +28, the Irish side were 53 worse off going into the last game or -26.5 when you consider a score for Munster is subtracted from Gloucester. This is why there was a need for a 27 winning margin. This then looked afterwards:

Munster were +2, and Gloucester +1. In the seconds before Ronan O'Gara's last minute conversion, Munster were 0 and Gloucester +3. That famous kick saw a 4-point swing and was enough for Munster to progress.

Interestingly, Perpignan were -3 and lucky Head-to-Head Tries Scored was the first criteria! In fact, any Munster win with 5 tries would have been enough to secure at least 2nd (even a one point win) so long as Gloucester didn’t score a try.  

Thankfully, the introduction of bonus points in the 2003/4 competition means the complications associated with Munster's "Miracle Match" is unlikely to be repeated. 

By Robbie Butler

Rugby's Six Nations Championship kicks off tomorrow at 2.15pm when Wales host Scotland at the Principality Stadium in Cardiff. This time last year I wrote about the introduction of bonus points in the Championship for the first time and the possible rationale for the rule change. 

The 2017 tournament resulted in the award of 11 bonus points in total. 5 bonus points were awarded for scoring four or more tries while a further six were awarded as losing bonus points (losing by seven or fewer points). As one might expect, the 2017 winners England gained the most (winning 3 bonus points over their five games), while Ireland, France, Scotland and Wales all won two bonus points each. Only Italy did not benefit from the new system.

It is to Italy I now turn. As the newest member of the group, joining in 2000, Italy have traditionally been the weakest team in the Championship. The ​Azzurri have collected the "wooden spoon" (award for finishing last) on 12 of the 18 times they have played in the Six Nations, including the last two years. As stated, the bonus points system failed to helped them last year. 

A more subtle problem might also be emerging. Given the relative weakness of Italy, the other teams could 'target' them for bonus points. England, France, Ireland and Scotland all won try bonus points from their games with Italy. The only other try bonus point was won by England in their victory over Scotland. This may be an unintended consequence of the rule change.

An analysis of Italy's points difference from their first appearance in 2000 to last year's competition is presented below. 

As one might expect, the Italians have never recorded a positive points difference. 

What could be of concern for the country and rule makers is the 2017 observation, the last point on the graph. The country reported their biggest negative score ever, with a points difference of -151. This coincides with the introduction of bonus points. 

It is important to note, this is a single data point, and more are required before one can start to draw conclusions about any potential unintended effect the new rules have had on the Italians. It is interesting however. That said, their performance in 2016, before the bonus points system commenced, was their worst to date. Maybe the team is just weaker than ever before? Either way, it will be interesting to watch the Azzurri over the next six weeks to see if the trend continues.

by Declan Jordan

The Irish rugby team is currently two games into their three game Autumn Series, with victories over South Africa and Fiji. The final game is against Argentina this coming Saturday. A lot of attention has focused on the inclusion in the Irish squad, and the team for the opening game against the Springboks, of Bundee Aki. He plays for Irish provincial side Connacht and qualifies to play for Ireland through the residency rule. This rule allows players to represent a country if they have lived in that country for three years.

The period of residency will extend to five years from 2020.

Neil Francis, a former Irish international and now a media analyst, was very vocal in his criticism of the selection of Aki. He wrote “It is wrong, irrespective of how good he is, that an Irishman born and bred here should sit on the sideline while somebody who has no connection whatsoever with this country, other than drawing a large wage, takes his place”. He also said “The prime criteria for being selected to play for Ireland is that you be Irish above all other things. You can be committed to the cause, but you can be paid to be committed to the cause. You can learn the anthem. You can die for the jersey. Pick a jersey, any jersey and I will die for it. You can quote rule 8 to me as long as you like but you can't trade out your heritage”.

Ewan McKenna wrote that the residency rule is a form of financial doping.

Bundee Aki is not the first player to qualify and be selected by Ireland under the residency rule. CJ Stander’s and Jared Payne’s inclusion have also been questioned. In the Irish squad for the Autumn Series there are several Irish players born outside of Ireland. It’s unclear where this leaves Neil Francis’ suggestion that we should always favour an “Irishman born and bred”. As well as Stander and Aki, those born outside of Ireland include Ultan Dillane, Kieran Treadwell, Joey Carbery, Kieran Marmion, CJ Stander, and Rob Herring. Some have Irish parents and came to Ireland when young, such as Dillane and Carbery. Treadwell and Marmion have Irish parents but did not go to school in Ireland.

There are at least two issues being raised here. The first is what makes somebody Irish. Is a player born in, say, the US whose grandfather left Ireland as a child and who has never visited Ireland ‘more Irish’ than a player who has chosen to spend a substantial portion of his career in Ireland, married an Irish person, and raising a young family born in Ireland? The latter case describes Jared Payne. Identity is becoming a more complex concept as the world becomes more integrated. There is no clear way of defining Irishness, and it is getting even more difficult.

Second is the issue of “financial doping”. This is alarmist. Doping is associated with rule breaking. There are no rules being broken. The residency requirements apply to all countries and many countries use them more than Ireland. The difficulty in individual cases means it is good for World Rugby to set clear rules on eligibility.
​
There is a more worrying development into which the furore over “heritage” and “Irishness” feeds. Ireland is a small country with a large diaspora. There are Irish people all over the world. Many families were forced to leave Ireland to get jobs and/or to escape a repressive social climate. Should their children and grandchildren be considered less Irish than the descendants of those who remained? The Irish football team has a long history of selecting players (in line with the rules on eligibility from FIFA) who have at least one Irish grandparent and have no other connection with the country. In the recent squad for the play off against Denmark, 10 of the 26 players were born outside of Ireland.

Scott Hogan is the most recent new recruit that fits that bill. In Irish football there has rarely been any controversy that these players are less Irish than those born here. However, Cyrus Christie has revealed the racist abuse he has received following Ireland’s disappointing defeat against Denmark in the World Cup playoff. He has revealed this has been going on throughout the campaign and includes calls for him to go back to “where he came from”. It is telling that white players born outside Ireland are not told that.

The terms of ‘heritage’, ‘blood’, and ‘born and bred’ being used in reference to a player’s chosen identity open the door to those who feel some, because of their ethnicity, are less than Irish. If a player chooses to play for Ireland we should welcome him or her as one of our own.

By Robbie Butler

The 2017/18 European Rugby Champions Cup begins tonight when Ulster take on Wasp at Kingspan Stadium, better known as Ravenhill. This will be the 4th instalment of the Champions Cup, which replaced the Heineken Cup at the start of the 2014/15 season.

As has been the case since the 2014/15 season, 20 teams enter the pool stages, and are split into five groups of four teams. Teams in the same pool proceed to play each other twice, at home and away, between this weekend and the 3rd weekend in January 2018. At the end of the pool stage, the five pool winners and the best-runners up in three of the pools, proceed to the knockout, quarter final stage of the competition in Spring 2018.

This structure is slightly different to the previous Heineken Cup, where 24 teams entered the pool stages, in six groups of four. What has remained unchanged however, are the award of bonus points. Teams that manage to score 4 tries are awarded one attacking bonus point. One defensive bonus point is awarded to a team for losing a match by seven points or less. As always, four points are awarded to the winning team. If a game is draw two points are awarded to both teams.

Myself and two colleagues have considered the impact bonus points have had on outcomes both before and after their introduction into the Heineken Cup from 1996/97 (2nd season) to 2013/14 (final season). Our findings are very interesting.

The try bonus is extraneously effective in producing greater try-scoring outcomes, by encouraging teams to score an above-average number (four) of tries. We find that after the introduction of the point at the start of the 2003/04 season:

• Home teams are significantly more likely to score 4 tries.
• Home teams are significantly more likely to score a 4th try, having already scored 3 tries.
• Away teams are significantly more likely to score a 4th try, having already scored 3 tries.

There is a catch however. Since 2003/04:

• Home teams are significantly less likely to score 5 or more tries.
• Home teams are significantly less likely to score a 5th try, having already secured a bonus point.

So while the bonus point has worked, there is an unintended effect – that of teams scoring less tries beyond the bonus threshold. This factor is responsible for much of the decrease in average tries scored in the bonus points era, rather than an increasing incidence of teams scoring low numbers of tries.

By Robbie Butler

The British and Irish Lions begin their much anticipated tour of New Zealand this weekend. In total, the tourists will play ten matches during a five-week period, including three tests against World Champions New Zealand. One has to go back to 1971 to find the last, and only time the Lions won the series in New Zealand, with the All Blacks subsequently successful in 1977, 1983, 1993 and 2005. In fact, the last visit to New Zealand saw a whitewash victory for the hosts (3-0).

Success on the pitch is not the only benefit for New Zealand. A 2011 paper in Tourism Management by Johan Fourie and María Santana-Gallegob, entitled ​"The impact of mega-sport events on tourist arrivals" considers the impact of international visitors of six major sporting events. The six are  Summer and Winter Olympic Games, FIFA World Cup, Rugby World Cup, Cricket World Cup and British/Irish Lions Tour over the period 1995–2006. The results provide interesting reading. 

The authors find ​"...on average, mega-sporting events increase predicted tourism by roughly 8% in the same year. There is, however, large disparities between the types of event; the Summer Olympics, FIFA World Cup and, to a lesser extent the Cricket World Cup and Lions Tour, all seem to have a significant positive impact on tourism...while the Rugby World Cup and the Winter Olympic Games have a negative impact on tourism, ceteris paribus" (Fourie and Santana-Gallegob, 2011: 1364-1367). 

Crowding out and timing are both cited as possible explanations for the latter two events with the authors suggesting that "This may be due to tourism displacement, but is probably more the result of the smaller nature of these events and because the events analysed here were held in countries with an already strong tourism demand" (Fourie and Santana-Gallegob, 2011: 1369).

They continue by saying that "the size of tourism crowding-out may depend on the season in which the event is hosted. Events held during peak season, on average, tend to show a decline in predicted tourism, while events held during the off-season attract significantly higher numbers than what is predicted" (Fourie and Santana-Gallegob, 2011: 1369).

By Robbie Butler

Ireland's leading economic and applied social science journal Economic and Social Review has just published its volume for Spring 2017.

Amongst the contributions is a paper by Peter D. Lunn of The Economic and Social Research Institute and Trinity College Dublin and David Duffy of Property Industry Ireland called "Are Perceptions of Greatness Accurate? A Statistical Analysis of Brian O’Driscoll’s Contribution to the Irish Rugby Team".

The abstract reads as follows:
"We test whether public perceptions of Brian O’Driscoll’s greatness were accurate. O’Driscoll was an automatic selection for Ireland’s rugby team yet missed matches through injury, allowing us to treat injury as random. We estimate that O’Driscoll was worth a converted try per game and improved the chance of victory by more than home advantage. None of O’Driscoll’s Irish contemporaries made such a contribution. His impact also compares favourably with New Zealand’s best players of the era. Our estimates have implications for debates about wages in professional rugby. They also demonstrate how statistical techniques can be applied to an everyday issue, allowing us to conclude that perceptions of one Irishman’s greatness were warranted".

It seems O'Driscoll was just as important as we all believed!

​The full paper can be accessed here.

By Robbie Butler

The 2017 Six Nations Championship starts tomorrow. Scotland host Ireland at 2.25pm with the winners claiming the Centenary Quaich. The match is the first of fifteen fixtures that will be screened over the coming six weeks, with the culmination of the tournament on Saturday the 18th of March.

The final set of fixtures are interesting from the point of view of the economist. Despite this tournament following a round-robin format, the final three matches kicked-off at the three different times. This is important as it could impact upon the incentives that exist for teams competing to win the tournament.

Consider the 2015 contest. Going into the last round of fixtures England, Ireland and Wales were all tied on six points each, having won three and lost one match each. If all three teams won their final fixture (each were playing Italy, Scotland and France respectively), the tournament would be decided by points difference.

Prior to kick-off in the first game on Saturday the 21st of March 2015, England had a points difference of +37, Ireland +33 and Wales +12. Had all three games kick-off together, no problem would exist.

The games started at different times however. Wales and Italy started at 12.30pm CET (UTC+1). The Welsh winning margin was 41 points. This left the principality on a score difference of +53 meaning Ireland would have to beat Scotland in the 2.30pm GMT (UTC+0) game by at least 21 points to have any chance of winning the tournament. The Irish managed to win by a margin of 30 points, ending Wales’s chances of lifting the trophy.

Attention then turn to Twickenham and England versus France. With Wales eliminated, and Ireland on +63, England knew a winning margin of 27 points would see them crowned 2015 Six Nations champions. What followed against the French was the 2nd highest scoring game in Six Nations history! The game ending 55-35. Only England versus Italy during the 2001 tournament has seen more points scored, with the scoreboard reading England 80 – 23 Italy. The winning margin of +20 wasn’t enough for the English and Ireland were crowned champions.

To avoid possible problems like this organisers have instituted necessary rule changes. This year’s tournament will see the introduction of a bonus point for the first time. A country scoring four or more tries during a match will receive an additional point. Countries losing by seven or fewer points will also receive a bonus point. Furthermore, three bonus points will be awarded to a country completing a Grand Slam (wins all of its five matches) to ensure that they will also be crowned champions.

These rule changes are motivated by incentives and a very welcome change. Kendall and Lenten (2017) provide a lovely overview of when sports rules go ‘wrong’ across various sports and should be consulted for further reading. 

by Declan Jordan

​This has been a pretty dismal season for Irish rugby clubs in European competition. Both Leinster and Munster were out of the competition with two games to play in the group stages. Ulster require a bonus point win and a string of favourable results to emerge from their group. Connacht, in the Challenge Cup, is likely to be the only Irish team in European competition after the Six Nations.
 
It’s probable that this will be the first season since 1998 that an Irish side will not appear in the knock-out stages of the elite European club competition. The situation was very different in the not-so-distant past when Munster and Leinster between them shared five titles in the six seasons between 2006 and 2012. It is important not to overstate the perceived decline of Irish club rugby based on one season (after all Munster and Leinster have appeared in the semi-finals in the last three seasons – sharing that with Toulon, Clermont and Saracens), there are persistent warnings that Irish clubs are no longer in a position to compete, and that this problem is likely to get worse before it gets better. There have been accusing fingers pointed at French Top 14 clubs (particularly Toulon) and English Premiership clubs for distorting the market for rugby playing talent with their large chequebooks – often funded by wealthy owners.
 
Toulon has now won the trophy for the last three years. Over that time their squads have boasted some the greatest names in world rugby – and this year even has former Munster and Ireland talisman Paul O’Connell. It is argued that Pro-12 clubs cannot hope to compete with the financial muscle of the French and English leagues. There are almost daily reports of threats of elite Irish players being lured to France and England to play their rugby. This is likely to be true but the claims that this prevents a level playing field ring a little hollow when the benefits that Irish clubs in particular have enjoyed during their recent successful years.
 
The success of the Irish clubs in Europe was an obvious motivating factor in the changes demanded by French and English clubs in the new qualification rules for the European Cup (formerly the Heineken Cup). In a previous post I noted that elite players at French clubs played more championship games for their clubs than their Irish counterparts.

​Since top players were centrally contracted to the Irish governing body for rugby (the IRFU), players were used more sparingly. There was very little at stake in the ‘domestic’ competition of the Pro12 (or whatever it was called at the time) since Irish clubs were guaranteed their places in the following season’s Heineken Cup. This has now changed so Irish clubs are likely to take the Pro-12 much  more seriously. (In that context, Connacht’s resurgence is even more worrying for the more dominant Irish clubs with limited country representation in European competition).
 
The lack of qualifying pressure and the implicit financial subsidy involved in the central contracting of Irish players were distortions in the “level playing field” in European rugby in Irish clubs’ favour. The lack of concern at these distortions at the time from Irish rugby commentators and officials makes their current protests less credible.

by Declan Jordan

My research interests of regional and sports economics probably mean I am very drawn to locational or spatial factors affecting sports performance. There is a very large literature on the effects of location on the performance of businesses, whether measured by innovation, productivity or profitability. As far back as 1890, Alfred Marshall recognised the tendency for economic activity to concentrate spatially - driven, he suggested, by external benefits to concentration (now referred to as localisation economies) including knowledge spillovers, availability of skilled labour, and access to specialised inputs. Michael Porter argued in 1998 that "paradoxically, the enduring competitive advantages in a global economy lie increasingly in local things". Recently I have done some work on this spatial aspect of performance, such as here. 

This area is a potentially very interesting one for sports economics and regional science, as the special features of sports leagues and competition and the availability of data make it possible to get at important spatial effects.

An obvious feature of sports is the importance of different sports across locations. Of course some of this may be obvious, where winter sports are perhaps more likely to be popular in colder locations. However, are there significant differences in success rates spatially, and can these be attributed to local features? Ireland may be an interesting case here, since the country is so small it is difficult to see why sports may be consistently successful on a regional or spatial basis.

I have just begun to look at the data for Ireland, but the table below is an interesting starting point. It shows the location of the winners of the League of Ireland (football), All-Ireland Gaelic Football championship, All-Ireland Hurling championship and All-Ireland rugby league since 1980 categorised by NUTS3 region. There are, of course, some data issues. NUTS3 classification has not been in place since 1980, there have been winners of each title (with the exception of hurling) from Northern Ireland in that period [these have been excluded], and the rugby league has only been in place since 1992. I have chosen 1980 because it allows me to include a football winner from the Mid-West - my own club Limerick who last won it back then.

Some counties do not have a senior hurling team or a team playing in the League of Ireland or at senior club level in rugby. However, there is nothing to prevent a team from any county participating and progressing in each of these sports, and the failure to have a team at those levels may indicate the lack of popularity of those sports in that county and/or the dominance of another sport there. (A difficulty also arises for the separation of Tipperary into two NUTS regions, while they compete as one county in gaelic games. Tipperary championship wins have been split 50:50 between the Mid-West and South-East regions - which explains why there are "half-wins" in hurling).

The table shows the number and proportion of winners by region. It is noticeable that for each sport there is a region that has won over half of the titles. Also, the most successful region is different for each sport. In some regions the success is driven by one county (such as Kilkenny in hurling in the South-East or Kerry in Gaelic football in the South-West).

It is clear that even in a small country like Ireland location matters for success in particular sports. There are some possible explanations, such as a type of demonstration effect where athletes in a county/region are drawn to the success of a particular sport in that area. This means history matters and there is an element of cumulative causation. This could also occur in relation to attracting funding and sponsorship. Perhaps there are strong clubs at the level under these elite championships that generate stronger competition and better players and teams at the elite level.

These are all interesting potential explanations and the research agenda for spatial analysis of sports performance in a fascinating future research area.