Thursday, May 13, 2010

Bankers Say Brazil Will Win World Cup

According to this article in today's Telegraph, bankers at UBS have generate a mathematical model to determine the outcome of this summer's World Cup in South Africa.
UBS used its "econometric toolbox and quantitative models" to forecast the winner based on factors including historic results and the teams' current "Elo ratings" – which take account of not only recent wins, losses and defeats, but the conditions under which those events occurred. Beating a powerhouse like Brazil or Spain would improve a team’s Elo ranking much more than beating a smaller side like Malta or Andorra.
After running the model, the bankers make Brazil the favorite with a 22 percent chance of victory, followed by Germany at 18 percent and Italy at 13 percent. The chances of the US team are not reported. Six of the eight most likely winners are from Europe (France, Holland, Spain, and England, in addition to the two already named). Argentina joins Brazil on the list, but with only a 5 percent chance of victory (although I wonder whether the modelers properly accounted for the likely contribution of Lionel Messi).

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