Open Market Valuation of Player Performance in Cricket: Evidence from the Indian Premier League

Abstract

This paper investigates the final bid prices for players during the first three seasons of the Indian Premier League (IPL). Although the IPL imposes a salary cap and other labor-market restrictions, it is anticipated that final bid prices reflect the aggregate value of player productivity statistics, potential leadership skills, and auction characteristics. The empirical analysis follows the methodology used to investigate wage determination in other professional sports. We find that cricketer salaries are influenced by player characteristics and that the marginal values have not been changing during the first three years of the league. We find little evidence for systematic wage discrimination against players who are not Indian nationals. We also find little evidence for systematic differences in average salaries paid across the eight franchises in the league.

Keywords: professional sports, auctions, discrimination

JEL Classification: L83, J31, J70