PwC: Brazil, favorite to win the World Cup

Brazil are the statistical favorites at this year’s World Cup tournament, while England would do well to get beyond the quarterfinals based on both current FIFA world rankings and historic World Cup performance.

The PwC paper – What can econometrics tell us about World Cup performance? – found that there is no significant link between average income (GDP per capita) levels and tournament success. Relatively low-income countries from Latin America have often matched or beaten their more affluent European rivals, particularly when playing in their home region.

However, population size has some effect on World Cup performance, but it is not statistically significant. Argentina, for example, has sometimes matched Brazil despite only having a fifth of its population. Relatively small countries such as Hungary, Sweden and Croatia have also punched above their weight, particularly when playing at or close to home.

Home advantage and the strength of historic football traditions may turn out to be the playmakers in World Cup success.

“Our analysis shows that low-average income levels are no barrier to World Cup Success, nor is population size as critical a factor as you might expect – David can often beat Goliath on the football field. Those countries with a culture steeped in football and passionate national following can outplay the powerhouses of the world economy”, said John Hawksworth, head of macroeconomics, PricewaterhouseCoopers.

For example the US football team performs well below expectations based on the size of its economy or population relative, for example, to Brazil. This reflects the ascendency of football in Brazil as contrasted to the greater popularity of sports such as American football and baseball in the US.

China and India are even more dramatic examples of low levels of World Cup success relative to populations of over one billion and rapidly growing economies. India prefers to focus on cricket, while China has concentrated on sports that maximized their potential gold medal haul in the 2008 Beijing Olympics.

“If a country has a strong football tradition, then finding 11 international class players should not be that difficult even from a population of just a few million”, said John Hacksworth.

In addition the study found no statistically significant correlation between GDP per capita and either current FIFA rankings or historic World Cup performance.

“This may reflect the fact that basic football skills cam be hones as easily in the back streets as in an expensive sports center. Furthermore, football may represent one of the most appealing ways out of poverty for boys in lower income countries”, John Hacksworth added.

Home or away?

These findings for football differ from previous PwC research showing that population and average income levels impacted medals won in the Olympics Games.

However, home advantage is one factor that is found to be highly statistically important in explaining success in both the FIFA World Cup and the Olympic Games.

The host nation has won six out of 18 World Cups and, even when they did not win, the home countries have generally had strong campaigns.

England and France won only the World Cup when playing on home soil, while smaller countries like Uruguay (which won at home in the first ever World Cup in 1930), Sweden (which reached the final at home in 1958) and South Korea (which beat Italy and reached semifinals in 2002) have all outperformed expectations when hosting the World Cup.

Spain’s relatively modest performance when hosting the competition in 1982 was one of the comparatively rare exceptions to the rule.

There is also a clear host region effect that may be associated with strong home crowd support and familiar climatic conditions. European countries have only won the World Cup when it has been held in Europe, while Latin American teams have won all of the World Cups held in Americas. Cameroon and Nigeria should therefore have the potential to do relatively well this year, while South Africa should do much better than its lowly FIFA ranking of 90th suggests.

“Brazil remains the favorite to lift World Cup this summer as the number of one-ranked football nation and the only country that has won the tournament outside its home region. England seems a reasonable bet to reach the quarter finals based on its current FIFA world ranking and pasty World Cup performance, but it will do well to get beyond that point – which it has never done before when playing outside Europe”, John Hawksworth pointed out.

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