Gini playing soccer

Abstract

The level of income inequality in a European country influences the competitive balance of its major soccer leagues. We test this hypothesis using cointegration techniques for seven male professional soccer leagues (the Dutch, English, French, German, Italian, Spanish and Ukrainian soccer leagues) from the 1980/1981 season to the 2011/2012 season. Controlling for the level of income inequality using variables such as real GDP per capita, trade openness and the emigration rate, we conclude that income inequality (measured by the Gini index) causes changes in the measures of competitive balance that we employ (the Hirschman–Herfindahl index and the SD) concerning the final number of points scored by the various teams.