Hedonic regression and the IPL

How to buy an IPL cricketer? In a paper to be soon published in the Journal of Sports Economics, Ajit Karnik, a professor of economics at the Middlesex University campus in Dubai, placed the IPL player auction of 2008 under the scrutiny of an econometric instrument known as hedonic regression. The result was an equation to help determine a cricketer’s value; the more remarkable by-product, however, was its accurate picks of IPL 2008’s four semi-finalists and its eventual winner. Karnik explains the theory to Samanth Subramanian in Mint.

Here’s where it helped to be a cricket nut as well as an economist. The basic price equation would have to include runs and wickets, and Karnik knew enough about the non-stop nature of Twenty20 to fold age into that mix as well. For data, he used the players’ previous one-day international records, since many of the cricketers in the auction hadn’t played even a single Twenty20 game.