Abstract

The Indian Premier League (IPL), a professional league for Twenty20 (T20) cricket championships was started in 2008, in India. The IPL was initiated by the BCCI with eight franchises comprising players from across the world. Franchises acquired players through an English auction that was conducted every year; however, there were several rules imposed by the IPL. The prices of IPL players ranged from as low as $20,000 to more than $2 million for a tournament played over 7 weeks. Three of the nine IPL teams appeared in the list of 50 highest paid sports teams in the world in a survey conducted by sportingintelligence.com in May 2012. 

The IPL teams had several restrictions on how much money they could spend on acquiring their players, and it was important that they spend their money wisely to put together a successful team, after gauging the true value of a player. The performance of the players could be measured through several metrics. Although the IPL followed the Twenty20 format of the game, it was possible that the performance of the players in the other formats of the game such as Test and one-day matches could influence player pricing. Anecdotal evidence suggests that factors such as batting strike rate, bowling strike rate, economy rate, and ability to take wickets; drive the price of players. The focus of this case is to understand the true value of a cricket player that can be used during the player auctions. 

Learning Objective

The primary objective of the case is to demonstrate the use of multiple regression for finding a relationship between the price of cricket players and performance measures. Additional learning objectives include: 

1. Regression model building and validation of the regression model.
2. Illustrating the use of dummy variables and interaction variables in model building.
3. Comparison of different regression models.
4. Check for multi-collinearity and heteroscedasticity.