Valuing Cricketers Using Hedonic Price Models

Abstract

This article is concerned with estimating hedonic price equations for cricketers. The 2008 auction in India for cricketers to play in the Indian Premier League (IPL) of Twenty20 cricket has revealed the bids made for 75 players. Using the information on the bids, the author has estimated hedonic price equations. The author finds that the usual way of judging cricketers—in terms of runs scored and wickets taken—is reflected in the estimated equations. In addition, young players command a substantial premium over other players as do players from India and Australia. The author extends the analysis to evaluate the performance of players in the IPL tournament of 2008 and estimates the rates of return to the owners of the teams. The estimated models are checked for robustness by incorporating the results of the IPL Auction of 2009. The author finds that the models are robust to the inclusion of additional cricketers bought during the latest IPL auction.