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BERNARDO M. VILLEGAS

June 11, 2010

Soccermania and Soccernomics

This week, with the start of the World Cup in South Africa, more than two billion soccer fans all over the world will be glued to their TVs and other electronic gadgets for viewing sports eventsas they get snarled in soccer mania. Unfortunately, most Filipinos will be more interested in the NBA finals with the Lakers and the Celtics fighting it out for the championship. The Philippinessticks out like a sore thumb, together with its mentor the United States, for not being passionate about soccer and pursuing the impossible dream of excelling in basketball. Let me be facetious bysuggesting that our economic backwardness in Asia may be attributed to our not having soccer as a favorite sport, as contrasted with our more developed neighbors like South Korea, Taiwan,Hong Kong, Malaysia, Singapore and even Indonesia. I wish a new generation of Filipinos will take the cue from Paulino Alcantara, a Filipino-Spanish mestizo, who was a legendary superstarin soccer when he played for the Barcelona team in the 1920s. This may, however, be wistful thinking.

Ironically, the ones who may have the motivation to promote soccer in the Philippines will be our politicians who double as jueteng or gambling lords. There is much money to make in betting in the results of soccer game. In fact, betting on the various teams in the World Cup has become a big business. In some countries--especially in Latin America and Africa--betting on soccer resultscan be legal. But it can also be the source of a lot of corruption, with game fixing being rampant. Soccer has so many dimensions that can be subjected to economic analysis that two writersfor Financial Times, Simon Kuper and Stefan Szymanski, have authored a book entitled Soccernomics. As reported in the magazine Finance and Development (March 2010), the authors"weave academic analysis and anecdotes from individual players, managers, and teams across the world into a highly readable and entertaining book about the most popular sport in the world. It would have been more fun in undergraduate economics to learn game theory through penalty kicks or regression analysis through examples."

According to Soccernomics, a nation's income, population, and soccer experience are the main determinants of a team's survival in the first round of the World Cup. The authors immediatelypoint out, however, that these three factors explain only 25 percent of the variation in goal differences; the remaining 75 percent is unexplained random noise or sheer luck. These conclusionswere derived from the application of the tools of econometrics. Other interesting findings of their models are that hosting the World Cup or European Cup reduces suicides in European countries. Or that Norway is apparently the most enthusiastic soccer country in Europe. Or that Iraq is among the best overperformers in world soccer. Or that 50 percent of British ticket holders don't take up their seats the next season.

Another light-hearted application of soccernomics was that of JPMorgan economists. As reported in the Financial Times (May 19, 2010), some "quants" analysts of this leading bank usedtheir econometric model to forecast the winner of the World Cup in South Africa. The fans of David Beckham need not lament the absence of this soccer player turned glamor boy in the Englishteam because of an injury. According to the JPMorgan prophets, England will win the title. Ha, ha, responded the bookmakers. No wonder these same econometric models were the onesused by these banks before they got into trouble together with Lehman in the ongoing global crisis. Who then are the bookmakers' favorites? Brazil and Spain.

In the same lighthearted way, I have used my forecasting model (as the prophet of boom) to predict that it will be Spain who will win the World Cup. Remember Spain won the gold medal in soccer in the Olympics in Beijing. I also based my fearless forecast on examining the members of the Spanish team. As goalie, there is Real Madrid's Iker Casillas, one of the best in the world. Then there is the solid team from my favorite Barca: Xavi Hernandez, Sergio Busquets, Andres Iniesta, Pique, Pujol and Victor Valdes. With six players from the team that established a recordby winning all seven titles that any team can win in a given year last 2009, the Spanish team is unbeatable. Not because these players are individually as good as the "pichichis" (superstarslike Lionel Messi, Ronaldo or Kaka). But because they have learned to play as a team under their outstanding coach Pep Guardiola of Barca. Then add to these Villa of Valencia andTorres and Cesc Fabregas who regularly play for teams in the U.K. If I could convince the jueteng lords who are now mayors or governors in some Philippine localities to start a bettinggame on the World Cup, I would put my bet on Spain.

My second choice is Brazil. I subscribe to the an Associated Press (AP) release that Brazil goalies can steal the limelight: "More known for its skillful strikers, Brazil will try to win its sixth World Cup in South Africa backed by goalkeepers rated among the best in the world. Julio Cesar--fresh from his successful Champions League campaign with Inter Milan--will be Brazil's starterwhen the tournament begins...and Tottenham's Heurelho Gomes--voted among the best goalkeepers in the Premier League this season--will be his backup."

So, let the games begin. I hope there are enough young Filipinos (I give up with the older ones) who will get excited about the matches in South Africa. Together let us watch at leastthe first game of Spain with Switzerland, which will be on June 16 at 10:00 a.m. After forecasting the victory of Spain, I will once again turn to forecasting the GDP for the second quarter. The doubters of the strong growth of the first quarter will be surprised. The second quarter will even be stronger: more than 8 percent. You better believe it. For comments, my email address is .