Hammers co-owner David Sullivan recently admitted the club would not have signed the striker if they knew he would be so injury-prone, but the manager insists the deal made sense
The England international has failed to make an appearance for the club this season, having signed from Liverpool in June, but is back in training following a foot injury.
West Ham co-owner David Sullivan this week admitted that if the club knew Carroll was going to spend so much time out injured, they "would not have signed him".
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Allardyce understands his employer's view, but insists the £15 million deal to bring him from Liverpool in the summer made perfect sense at the time.
"He [Sullivan] said, 'Only at the end of the season will we be able to judge whether Andy Carroll is a good investment'," the Hammers boss told reporters.
"[Given] the size of that investment I can understand why he's said that.
"It's not [Carroll's] fault he's injured, he's the difference between us winning more games and us not.
"If you look at our win ratio with Andy Carroll [compared] to without him, it was pretty obvious [in the close season] we should sign him.
"It's like Manchester City not having [Sergio] Aguero or [Alvaro] Negredo."
Allardyce believes a lack of belief, as well as absentees through injury and suspension, have caused West Ham's form to dip in recent weeks.
"You wouldn't say [the performance was] 'one of those things'. I would look at the nervous tension that I have to relieve around the place at the minute," he continued.
"This game was no bigger than the Fulham game two weeks ago. Both teams needed a win and we played a fantastic game and won comfortably 3-0.
"Today we didn't see that. I've picked up a lot more injuries and suspensions since then, so my squad has got thinner.”