Can the Wisdom of the Crowds predict the results of the 2018 World Cup?
The 2018 FIFA World Cup ended a few weeks back and what an event it was. The World Cup, like the Olympics, is one of those unique sporting events that has the ability to captivate just about anyone and everyone, whether you are a hardcore football fan, a casual fan or normally not a fan at all. While not every country is represented at the World Cup—in fact, the vast majority of countries are unrepresented—this doesn’t stop people all over the world from taking part. 3.2 billion people tuned in to watch the World Cup in 2014 and forecasts for viewership for 2018 came in at 3.4 billion according to Research company GlobalWebIndex. That’s just about half of the world’s population.
Given the interest in the event around the world, we decided to conduct an experiment to see if we could predict various results of the tournament. We used a concept known as the Wisdom of the Crowds to see how accurately a group of people could predict certain outcomes of the World Cup in various statistical categories such as, goals scored, yellow cards given, red cards given, etc. But before we get into the results, let’s look at the concept of the Wisdom of the Crowds.
What is the Wisdom of the Crowds?
The basic idea of the Wisdom of the Crowds is that the average of the answers of a group of individuals is often more accurate than the answer of any one individual member of the group. Essentially, if you were to poll a group of people on their predictions for a certain event, the likelihood that the answer of a single member of the group is more accurate than the average answer of the whole group, is well, not very likely at all. The Wisdom of the Crowds is therefore used in many different fields, such as economics, politics and psychology because of its propensity to predict accurate results.
Perhaps the best way to explain how it works is to tell the story of Sir Francis Galton, a Victorian polymath, who was the first to note the Wisdom of the Crowds at a livestock fair he visited in 1906. Attendees of the fair were given the opportunity in one contest to guess the weight of an ox. The closest to the actual weight would win a prize.
There were over 750 participants to try their hand at guessing the ox's weight. After all of the guesses were tallied, the interesting thing to note was that nobody got the exact weight of the ox spot on, but when Galton took all of the guesses from each participant and calculated the mean average, incredibly, the average turned out to be the exact weight of the ox: 1,198 pounds.
This is essentially how consensus forecasts work in economics, and it is the way FocusEconomics elaborates its Consensus Forecasts, leveraging the idea of the Wisdom of the Crowds. We collect, process and analyze projections from our global network of over 1000 trusted economic experts and ultimately condense that information to provide one answer, the FocusEconomics Consensus Forecast.
So, what does this have to do with the World Cup? We wanted to test if the Wisdom of the Crowds to predict various results of the World Cup. We polled over 200 economic analysts from our network of global analysts to get their predictions, and then we averaged them all out after the tournament had ended to see if the Wisdom of the Crowds was indeed able to predict the results. Spoiler alert, not everything went to plan, however, some results were almost perfect. We’ll explain that shortly.
Before we get into the results, we should address the big change to the 2018 FIFA World Cup that significantly skewed some statistical categories from their historical ranges and averages: video assistant referee (VAR).
VAR is a system that assists the referee of a game to make better decisions. A team of referees and assistants are located in a centralized location with access to all camera angles inside the stadium and advise the referee on situations that warrant review or that they believe the referee on the field may have gotten incorrect.
Although video replay technology has been employed to help officiating crews in many sports for years now, football (known in the U.S. as soccer) is one of the laggards in this respect. Some domestic club leagues around the world have adopted it in the last few years, but many still have yet to do so, including the most viewed league in the world, the Barclay’s Premier League. However, it was confirmed shortly before the tournament that VAR would be used for the first time at the 2018 FIFA World Cup.
It's important to note that VAR was only used in what FIFA deemed "game-changing" incidents. These incidents were goals, penalty decisions, direct red cards and cases of mistaken identity. And this is exactly what brings us to the skewed statistics mentioned previously, the number of red cards, penalties given, and logically, penalties scored, were skewed drastically from the historical ranges of all of the previous World Cups.
What wasn’t really impacted by VAR significantly were the various categories associated with goals (apart from penalties scored) and yellow cards issued. Although goal scoring situations were one of the incidents that VAR was supposed to help evaluate, there were very few instances where a goal was either allowed or disallowed after a VAR review.
With that said, you can see below the results of our experiment with the Wisdom of the Crowds in predicting outcomes at the World Cup:
To conclude, the Wisdom of the Crowds works remarkably well most of the time, however, it’s not always perfect, but predicting the future is not an easy thing to do. Using a consensus to predict the outcome of a certain event is a pretty good way of coming to a more accurate conclusion. What the consensus does more often than not is reduce the risk inherent with forecasting events, but there is almost always going to be some margin of error and that has to be kept in mind when predicting the future.
If you’d like to know more about how the Wisdom of the Crowds and Consensus Forecasts work to produce more accurate forecasts, check out the articles and academic research below:
- The Wisdom of the Crowds and the Consensus Forecast
- Consensus vs. Individual Forecasts: The Numbers Don’t Lie
“Consider what we have learned about the combination of forecasts over the past twenty years. (…) The results have been virtually unanimous: combining multiple forecasts leads to increased forecast accuracy. This has been the result whether the forecasts are judgmental or statistical, econometric or extrapolation. Furthermore, in many cases, one can make dramatic performance improvements by simply averaging the forecasts.”
Clemen Robert T. (1989) “Combining forecasts: A review and annotated bibliography” International Journal of Forecasting 5: 559-560
“A key reason for using forecast combinations […] is that individual forecasts may be differently affected by non-stationaries such as structural breaks caused by institutional change, technological developments or large macroeconomic shocks. […] Since it is typically difficult to detect structural breaks in ‘real terms’, it is plausible that on average, across periods with varying degrees of stability, combinations of forecasts from models with different degrees of adaptability may outperform forecasts from individual models.“
Aiolfi M. and Timmermann A. (2004) “Structural Breaks and the Performance of Forecast Combinations”: 2
5-year economic forecasts on 30+ economic indicators for 127 countries & 30 commodities.
Author: Brian Dowd, Marketing Coordinator
Date: July 30, 2018
TagsHousing Market United Kingdom OPEC Germany Eurozone Exchange Rate UK precious metals Base Metals Commodities Cryptocurrency Turkey Commodities Economic Growth (GDP) Vietnam Unemployment rate Brazil Eastern Europe Bitcoin India IMF Asia Sub-Saharan Africa Tunisia USA Spain Euro Area Company News Brexit Investment Russia Colombia China Portugal Inflation Greece Mexico Forex Precious Metals Commodities Nordic Economies Infographic Oil South Africa Iran Japan Consensus Forecast Africa TPP United States Italy Energy Commodities Agricultural Commodities Venezuela G7 Canada MENA France Gold Emerging Markets Banking Sector oil prices Argentina Healthcare Trade Major Economies Australia European Union Latin America Ukraine
Panama's economy is set to regain momentum this year on the back of the ramp-up in production at the Cobre Panama m… https://t.co/1VSuAjWx9r
2 hours ago
Measures underway to improve Colombia's fiscal account will likely restrain the pace of expansion in 2019. Read mor… https://t.co/iCfPnVCrmE
18 hours ago
Venezuela's economy is seen contracting 10.3% in 2019, which is down 1.9 percentage points from last month's foreca… https://t.co/lkB8zhWaHY
20 hours ago
Precious metal prices are seen rising 6.1% in Q4 2019 compared to the same period of 2018 (previous month: +4.8% ye… https://t.co/42pkJS5aeo
23 hours ago
Dominican GDP is seen growing 5.1% in 2019, which is up 0.1 percentage points from last month's forecast. Find out… https://t.co/AQay04xqi3
1 day ago
- Brexit Scenarios: Consensus of 14 Economic Analysts
- Sweden just formed a new government and approved its 2019 budget: what does it mean for the economy?
- Which countries have the highest public debt levels?
- Predictions for the global economy in 2019 from 13 experts
- Gurdgiev: Predictions for the global economy in 2019
- Daniel Lacalle's ideas for 2019: Change of cycle.
- Vietnam Poised to Profit from Free Trade Agreement Opportunities
- Canada in 2019: Interview with a Top Economic Forecaster
- Pound Sterling 2019 Exchange Rate: Projections from Leading Analysts
- Expectations for Latin America’s Economy in 2019
- Ethiopia and Rwanda: From Destruction to Development
- Key commodities trends to look out for in 2019
- What drove Gulf neighbors to bail out Bahrain?
- The Four Financial Bubbles and Their Impact on the U.S. Economy
- The Poorest Countries in the World
- Italy: The sick man of Europe
- What does Bolsonaro's presidential win mean for Brazil's economic outlook?
- The World's Top 10 Largest Economies
- In Latin America, taxpayers are tapped to shoulder the burden of a bank bailout
- How and when will the next financial crisis happen? - 26 experts weigh in
- China and Africa: A partnership under the spotlight
- The conditions are ripe for a Global Financial Crisis 2.0
- Uncertainty, instability and fear haunt a generation of Argentinians
- 5 things: What to expect for Mexico's economy in 2019
- 5 things: Brazil's economic downturn and what to expect going forward
- Emerging Market Currency Crisis: Everything you need to know
- Which ASEAN countries are most exposed in the event of a U.S.-China trade war?
- 75 Top Economics Influencers to Follow
- Emerging Markets Economic Outlook 2018 and 2019
- The Faces Behind Latin America’s Key Institutions
- 2019 Economic Outlook for the Top Oil Producing Countries
- Is your cup of coffee about to get more expensive going in to 2019?
- The Economic Implications of an Aging Global Population
- Can the Wisdom of the Crowds predict the results of the 2018 World Cup?
- Railway Mania: The Largest Speculative Bubble You’ve Never Heard Of
- From Riches to Rags: Have Cryptocurrencies Crashed for Good?
- Investment looks to Latin America, but forecasts are not encouraging
- Turkey: Erdogan has cemented his grip on power - now what about the economy?
- How can Latin America’s business environment benefit from technological change?
- Mexico: A look at the past, present and future as elections yield AMLO victory
- Italy’s New Populist Government and the Eurozone: Prelude to a Crisis?
- Latin America moves toward increased integration as U.S. protectionism grows
- How can Latin America increase productivity without affecting the quality of employment?
- How will Saudi Arabia's economy benefit from lifting the women's driving ban?
- Which countries are the most prepared for the upcoming digital revolution?
- India Under Pressure from the U.S. on Trade Policy
- The Story of Steel
- Latin America is the World Leader in eCommerce Growth Despite Serious Challenges
- What the TPP means for trade in Latin America
- Elections in Russia: Analysis and Implications
- Nearly a Third of Latin Americans Have No Right to a Pension
- A Look at Healthcare Models Around the World
- Newly-elected Chilean President Sebastian Piñera faces a myriad of challenges - economic and otherwise
- The Economic Effects of Trade Protectionism
- Regional Disparity: The Dark Side of Inequality in Latin America
- Coal: The story of the world's most abundant fossil fuel
- Venezuela's Electoral Conundrum
- Gold: The Most Precious of Metals (Part 3)
- Trump's 1st Year: 95 Analysts Surveyed on U.S. Economy
- The Latest on China and What's in Store for 2018
- An in-depth look at the Eurozone’s booming economy and the challenges that lurk in the shadows
- Increasing poverty in Latin America takes a breather thanks to improving economic dynamics
- What will be the most miserable economies in 2018?
- Is Spain doing enough to address its high youth unemployment rate?
- Has Latin America gone far enough in reducing barriers to international trade?
- Commodities Outlook: Oil, Natural Gas, Coal, Lead & Tin
- 21 experts tell us what the future looks like for cryptocurrencies and blockchain
- Turkish lira plummets to all-time low on Erdogan’s monetary feud and tense U.S.-Turkey relations
- Copper: The first metal mastered by man
- Nigerian Economy Still Treading Water Thanks to Oil Sector
- The Mercosur-EU Free Trade Agreement: Obstacles & Opportunities
- Elections in Chile: What the results could mean for the economy
- QE’s Untold Story: A Chart That Fed Correspondents Need To Investigate
- Holland’s fragile one-seat majority government targets economic growth at the expense of fiscal sustainability
- South Africa: Economy at a tipping point?
- Latin American Commodities: What’s behind the increase in demand and prices?
- Is the UK really "shackled to a corpse"?
- Spain-Catalonia: 7 economic experts weigh in on how the situation will affect the outlook
- How well is Spain's labor market doing since the crisis?
- Which countries will have the highest and lowest inflation in 2017?
- How vulnerable is Latin America to economic crises today?
- Iron ore facts and common questions answered
- The bulging economic costs of obesity
- How much investment is needed to salvage Latin America’s crumbling infrastructure?
- A Look at the Potential Impact of Brexit on the Dutch Economy
- Emerging Markets Are Kicking Into Higher Gear In 2017
- Why is foreign direct investment in Latin America falling again?
- Are Central Banks Nationalising the Economy?
- Bounty or burden? The impact of refugees on European economies is far from clear
- What’s the future of U.S.-Latin America trade relations?
- Taxes or cutbacks? Latin America's challenge of sustaining spending without causing debt to skyrocket
- Are uranium prices making a comeback?
- Taxing the Economy: Achieving a Delicate Balance
- How will emerging market economies perform in 2017?
- How will Latin America’s upcoming lengthy election cycle affect the reform agenda and credit ratings?
- Chilean Economy in Focus: Interview with Senior Economist of the Chamber of Commerce of Santiago
- CEOs Rank Top Economies for Growth Opportunities
- The Mobile Ecosystem & Latin America's Economy
- Prospects and Challenges for the Global Economy: Interview with Tim Cooper from BMI Research
- How will the Fed reduce its balance sheet & and how will the ECB end QE? - 19 economic experts weigh in
- Thoughts on "unwinding" QE from Frances Coppola
- The Fed and ECB at a crossroads: Unwinding QE
- Spain: The economy that continues to silence the critics
- Latin America: The Most Unequal Region in the World
- The History of OPEC: Has it been a Success?
- FocusEconomics Announces 2017 Analyst Forecast Awards Winners
- Latin America’s rising unemployment bucks nearly decade long trend
- Escape from the Central Bank Trap by Daniel Lacalle
- China's economic rebalancing act: What to look out for in 2017
- Driving Growth in Latin America: Challenges & Priorities
- Is the Global Economy Rebalancing?
- Commodity exporters face challenging times
- Recent Global Events Facilitate Mercosur-Pacific Alliance
- 23 economic experts weigh in: Why is productivity growth so low?
- Mexico's outlook as Trump nears 100-day mark
- Interview with Oxford Economics Senior Economist on implications of the possible outcomes of the French Presidential Election
- The anxiety of the small saver in a world of negative interest rates
- Brexit negotiations. Between Uncertainty and Urgency
- An Economic History of the EU from El Blog Salmón
- Baby Boomin': Implications of high population growth in Latin America
- Survey of International Economists Predicts a Le Pen Defeat in French Elections, Says Macron has Best Economic Plan
- Spain in a global context: developed economy with some challenges
- How much is crime costing Latin America?
- Predictions & Estimates from Economist Daniel Lacalle
- What economy will the new Dutch government inherit?
- “The data is not a true reflection of reality in India” Interview with Société Générale India Economist
- What are the prospects for Emerging Economies in 2017?
- What to expect in Asia for 2017
- Top Economics & Finance Blogs of 2017
- Latam to Resume Moderate Growth in 2017 but Important Risks Plague Outlook
- 4 Key European Elections That Will Impact the Economy in 2017
- How are security concerns and political chaos affecting Turkey’s economy?
- Global growth to edge up in 2017
- Set to breach targets again? Debt and deficit outlooks for Southern European Eurozone countries in 2016 & 2017
- What does Donald Trump mean for the U.S. economy?
- How will emerging markets perform in 2017?
- The economic impact of a break in U.S.-Philippines ties
- Trump election: Base metals surge due to infrastructure plan
- 5 updates on the Venezuelan economic crisis
- Canada: When your neighbor’s house is on fire…
- Short-term pain before long-term gain? A look at French labor reform and economic growth
- Asia: Unremarkable growth & unfulfilled promises?
- How India's latest monsoon is affecting the economy
- Innovation in Latin America: Potential Goes Untapped Due to Weak Economic Conditions
- Russian economy update in wake of OPEC deal announcement
- The Wisdom of the Crowds and the Consensus Forecast
- Can the peso predict the U.S. election results?
- There's no end in sight to the Venezuela crisis
- A Look at the European Union Political Calendar
- Survey of international economists shows uncertainty surrounding elections damaging U.S. growth prospects
- FocusEconomics partners with leading online statistics provider Statista
- Sub-Saharan Africa's 2016 & 2017 growth rates
- China: Recent postive economic data may be papering over the cracks
- The Italian Dilemma: Weak banks pose risk to already faltering domestic demand
- How much money do migrants from Latin America send home?
- The U.S.' (Not So) Mysterious Case of the Missing Men
- What to expect from the G20 economies by 2020
- The Pain in Spain: Robust GDP growth cannot mask the persistent structural deficit