Cup time is always exciting - although in the past the U.S. population didn't care that much. The 2002 Cup generated the germ of what was once a promising project but has since shifted to the back-burner: what impact does the cup tournament have on national income growth rates and do these rates significantly differ across different types of countries. If they do differ, and the rest of the world takes the month off every four years while the U.S. chooses not to - how much could this account for the per-capita income difference between, say, Brazil and the United States? Over the course of fifty years, or twelve cups, the "negative compounding" that the one-month fiesta might induce could be significant.

Well, I don't have the answer to that particular question, but we can take a look at some preliminary results. I regressed the one-year change in log real GDP (essentially a real GDP growth rate) on five continental dummy variables (South America is the reference continent), a dummy variable for those years when the world cup occurred, a dummy variable that takes a value of one if a country qualified for the world cup, additional dummy variables for how far the country made it in the world cup, and a dummy variable that takes a value of one if the country hosted the world cup, using a GLS procedure that allows for heteroscedasticity and country specific autocorrelation across countries.

The data describe an unbalanced panel of 146 countries from 1951 through 2000 and were obtained from the Penn World Tables and combined with world cup data that we gathered.

     dlnrgdp |      Coef.   Std. Err.      z    P>|z|     [95% Conf. Interval]

-------------+----------------------------------------------------------------

      africa |  -.0054362   .0027153    -2.00   0.045    -.0107581   -.0001143

        asia |   .0134052    .002869     4.67   0.000     .0077821    .0190284

    namerica |   .0074735   .0029221     2.56   0.011     .0017462    .0132007

         eur |   .0135593   .0026013     5.21   0.000     .0084608    .0186578

     oceania |   .0035837   .0039538     0.91   0.365    -.0041656    .0113329

worldcupyr   |  -.0031483   .0011778    -2.67   0.008    -.0054567   -.0008398

qualifiedwc  |    .002958   .0033245     0.89   0.374    -.0035579     .009474

secondround  |  -.0015984   .0045547    -0.35   0.726    -.0105255    .0073287

  roundof8   |   .0045202   .0056684     0.80   0.425    -.0065898    .0156301

  roundof4   |   -.003048   .0073198    -0.42   0.677    -.0173945    .0112986

    finals   |  -.0062801   .0117451    -0.53   0.593    -.0293001    .0167398

    winnerwc |   .0064542   .0140176     0.46   0.645    -.0210197    .0339281

      hostwc |  -.0056349   .0093987    -0.60   0.549    -.0240559    .0127861

       _cons |   .0147723    .002353     6.28   0.000     .0101606     .019384

The parameter on worldcupyr suggests that in the years of the World Cup, the average nation's annual growth in real GDP falls approximately one third of one percent!! However, it doesn't seem to matter how far a particular country makes it in the tournament. Additionally, hosting the tournament might have a negative influence on real GDP growth, although the effect is not distinguishable from zero.

Before everyone jumps up and down, this is a preliminary result. The major limitation in this specification is that the impact of the world cup is assumed to be constant throughout the 50 years of the sample, but it may be the cup has more of an impact today than it did forty years ago. Furthermore, it is assumed that the impact of the cup tourney is the same across all countries - large, small, rich, poor, north, south. The original question posed at the beginning of this post hypothesizes that the impacts are different. As I said, I hope to eventually find the time to turn attention to this idea.

Hopefully, this will plant a flag without promoting a scoop. More below the fold.

My brother Christian over at Turn the Screw put together the television schedule of the upcoming cup games. With his permission I posted it here in PDF format.

He also found a nice BBC wall chart of the cup games which he forwarded to me. In the spirit of fair use, I post it here in PDF format.

I predict 5 points for the U.S. in group play and that we move on to the second round. I'm going with a win over the Czech Republic and a draw with Ghana and Italy. That's a bit contrarian, but what the heck - I am not betting any money.

Many think our national team is overrated, and perhaps the FIFA ranking of #4 in the world is a bit high - we will likely not contend for the cup this year. However, overrated does not necessarily mean not good - many of the U.S. players are better than they were in 2002 after having had some more seasoning in European (and, ahem, MLS) play.

Good Luck to the US MNT and to all the teams in the cup.