Superstar Productivity and Pay: Evidence from the Australian Football League

Patrick J. Ferguson and Matthew Pinnuck

The Economic Record, 2022, vol. 98, issue 321, 166-190

Abstract: We use game‐level data from the Australian Football League (AFL) to examine superstar workers' productivity and pay. By exploiting teams' injury‐induced line‐up changes between games, we show that, compared with replacement‐level players, superstars increase their teams' likelihood of winning away games by approximately 15 percentage points. While we then show that betting markets appear to appropriately price superstars' marginal productivity, we present back‐of‐the‐envelope calculations that suggest that teams underpay superstar players by at least 30 per cent. We discuss how inaccurate performance evaluations, labour market regulations, long‐term back‐loaded contracts, clubs' attempts to reduce harmful intra‐team pay disparities and on‐field success as a form of payment‐in‐kind may explain our findings.

Date: 2022
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