| By: | Carlo Bellavite Pellegrini (Dipartimento di Politica Economica, DISCE, & Centro Studi Economia Applicata (CSEA), Università Cattolica del Sacro Cuore); 
Raul Caruso (Dipartimento di Politica Economica, DISCE, & Centro Studi Economia Applicata (CSEA), Università Cattolica del Sacro Cuore - Catholic University ‘Our Lady of Good Counsel’, Tirana, European Center of Peace Science, Integration and Cooperation (CESPIC)); 
Marco Di Domizio (Dipartimento di Scienze Politiche, Università di Teramo - Centro Studi Economia Applicata (CSEA), Università Cattolica del Sacro Cuore) | 
| Abstract: | This paper investigates the role of payroll and its distribution in 
determining the seasonal performances of Italian football teams playing in 
Serie A. The novelty of our investigation lies in the introduction of a new 
extent upon which to compute traditional measures of dispersion of payroll. We 
calculate the coefficient of variation on real wages, on corrected wages and 
on weighted wages, using players’ characteristics, so that the players’ own 
perceived differences are considered. This aids us in testing for the role of 
envy in determining the teams’ performances. We exploit a data set on Serie A 
from 2007 to 2019, exploring the wages of 1,509 players in different seasons, 
to produce 4,633 total observations. Since Serie A is an open league with 
seasonal relegations and promotions, we have unbalanced panel data derived 
from 220 observations of 35 teams over 11 seasons. We use the percentage of 
points achieved by teams and a measure associated to the position of the team 
(rank) at the end of the first round of each season as dependent variables, 
and then we employ panel data techniques to estimate fixed effect models. We 
find a statistically significant association of team performance with relative 
wages and with previous results, while the salary dispersion seems to have no 
effect on performances. Moreover, by restricting our sample to teams that have 
never been relegated, and so balancing the panel, our empirical investigation 
validates the cohesion theory, since more equally weighted wages are 
associated with better on-field performances. | 
| Keywords: | relative wage, payroll distribution, sport performance, Italian Serie A | 
| JEL: | Z20 Z22 Z21 L83 J49 | 
| Date: | 2021–01 | 
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie5:dipe0015&r=all |