Market efficiency in the European football transfer market

Abstract

This dissertation studies market efficiency in the European transfer market for football. Data on player statistics and transfer fees is collected over the five most recent seasons, and covers Premier League, Bundesliga, La Liga, Serie A and Ligue 1. With three linear regression models, we attempt to answer in which degree the market is efficient. The player rating model is meant to capture on pitch performance, and in turn used as an explanatory variable in the final transfer fee model. Two transfer fee models are then estimated based upon player- and market characteristics. Our findings show that there exists a premium for South American players, concluding that the market is weakly inefficient due to the premium on South American players.