Itaú BBA - 2014 FIFA World Cup Brazil: Who Has Better Chances?

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2014 FIFA World Cup Brazil: Who Has Better Chances?

May 26, 2014

we developed an econometric model, seasoned with a good pinch of football knowledge from Itaú’s team of economists

How will the global economy perform in the second half? Will U.S. interest rates increase faster than expected? Will commodity prices remain favourable to South America? Will growth return to Brazil? These are important questions, and we will continue seeking the answers. However, as June approaches, what everybody really wants to know is who is going to win the FIFA World Cup (FWC)!

Therefore, we have developed an econometric model, seasoned with a good pinch of football knowledge from Itaú’s team of economists, in an attempt to answer that question. Following some research, we were able to find a few variables related to a team’s probability of advancing in the FWC. We have not gone as far as predicting the winner, but we have pinpointed the four teams with the best odds of reaching the semi-finals of the tournament.

What factors determine the chances of success in the FWC?

What is behind a team’s success in a football tournament? We have selected three factors we consider to be the most important: Quality of the team at the moment, tradition and the support of the fans. Based on that, we have searched for variables that describe these three factors, and we have investigated, through econometric technique models, if these variables, in fact, have an influence on a team’s performance in the FWC. Let’s go over these factors in more detail.

Current quality: The quality of the team is possibly the key factor that makes a country a favourite to advance in the competition. In order to estimate this, we could use each team’s results in recent games, or even use variables such as the player’s market value – The most “expensive” teams should have the best players. An objective variable and quite complete in this sense is the FIFA ranking (see table). At the end of the day, it effectively summarises a country’s recent performance. It is quite practical, as it can be easily accessed from FIFA’s website We have tested this measure, and it showed good correlation with the performance of the teams in past FWC.  Moreover, the results of the continental championships (Copa America, UEFA Euro, Africa Cup of Nations, etc.) also proved relevant in predicting a team’s performance in the FWC.

Tradition: The tradition or “peso da camisa” as they say in Brazil, is an important factor in sporting events. It could be seen also as a “structural quality” of a national team. There are some countries that tend to structurally have good football, even if they are not very strong at the present moment. Hence, this element complements the first factor (current quality). To measure this effect, we have proposed two variables that have proved to be important when forecasting a team’s performance in the FWC: i) number of FWC titles won, and ii) whether the country is European or South American. That is: countries that have already lifted the trophy usually get far in the tournament (the greater the number of titles, the greater the probability of winning). Countries from Europe and South America have had, on average, a better historical performance in the FWC than countries from other continents.

Supporters: The fans usually make the difference. Therefore, the country that plays in front of its home supporters usually has a significant advantage. Do countries playing at home have an extra boost? The results confirm this. We only have to look back at South Korea’s historic tournament in 2002. In fact, on six occasions, the host country has won the tournament. Countries such as Sweden and England only reached the final when they organised the event. Apart from the “host country,” we analysed the “host continent” to see whether hosting the FWC on a continent would help the teams from that same continent (the supporters have to travel shorter distances). This variable has little statistical significance.

Element of surprise: Africa and Asia. As well as objective variables, there are some trends that we considered important enough to include in our model, even if this requires a larger degree of subjectivity. Since the 1990 FWC in Italy, we have always had an African team reaching at least the second round (Cameroon, Senegal, Ghana, Nigeria), and we have had an Asian team (Japan, Korea) in most of them. Consequently, in order to keep this trend, we assumed in the model that an African and an Asian national team would qualify for the second round. Having examined the performance during the qualifying groups in these regions, and after carrying out a qualitative analysis of both groups and teams, we conclude that the teams that would qualify are Ivory Coast and Iran.


We have collected data from all the FWCs since 1994. The results are shown in the table below. All the main candidates would go through the group stage, with England the only exception, which, according to our model, should be defeated by Italy and Uruguay in the so-called “group of death”. In the Round of 16 (“oitavas”), strong names such as Colombia, Mexico and Russia also should step out the “road to Rio”. 

The quarterfinals bring us a tight match between Italy and Spain. Italy is a four-time FWC winner and one of the teams with the strongest FWC tradition. However, Spain is the title holder, and currently it is at the top of the FIFA ranking. On top of that, Spain crushed Italy 4-0 in the Euro 2012 final match. Then, if we are right, Italy goes home in the quarterfinals.

In the end, Brazil, Spain, Argentina and Germany meet in the semi-finals. It will be historic! Eleven FWC titles in play, and football rivalries as big as the tournament itself. From here on, we do not dare to make a projection: it shall be up to the will of the football gods.

Finally, the old saying as a disclaimer: football is full of surprises! Our model does not leave much room for “upsets,” but they always occur during the FWC (knowing what those upsets will be is the difficult part!). When Brazil and Croatia walk onto the field on June 12 for the opening match, it all starts from zero. It will be eleven against eleven, and whoever scores first gets the upper hand!

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