nep-spo New Economics Papers
on Sports and Economics
Issue of 2007‒06‒30
six papers chosen by
Joao Carlos Correia Leitao
University of the Beira Interior

  1. Short-term to long-term employment effects of the Football World Cup 1974 in Germany By Florian Hagn; Wolfgang Maennig
  2. Market Impact of International Sporting and Cultural Events By António Miguel Martins; Ana Paula Serra
  3. Superstars and Journeymen: An Analysis of National Football Team’s Allocation of the Salary Cap across Rosters, 2000-2005 By Kevin G. Quinn; Melissa Geier; Anne Berkovitz
  4. NASCAR as a Public Good By Dennis Coates; David Gearhart
  5. Gender Differences in Performance in Competitive Environments: Evidence from Professional Tennis Players By Paserman, Marco Daniele
  6. Hooliganism and Police Tactics: Should Tear Gas Make Crime Preventers Cry? By Panu Poutvaara; Mikael Priks

  1. By: Florian Hagn; Wolfgang Maennig (University of Hamburg)
    Abstract: This study demonstrates that the Football World Cup 1974 in Germany was not able to generate any short to long-term employment effects that were significantly different from zero. It is the first work to examine long-term employment effects of Football World Cup tournaments. It is also one of the first work to undertake a multivariate analysis of the employment effects of a major sporting event outside of the USA. In addition, this study does not arbitrarily determine the time period for the potential positive effects of a major sporting event but instead examines several alternative periods. Furthermore, the study tests for method sensitivity by analysing the data set in parallel with the approaches used in the studies of sporting events in the USA as well as in a fourth modifying estimation approach. In contrast to the conclusions reached in comparable studies, the results are not regarded as a clear refutation of the positive effects of major sporting events.
    Keywords: Labour market, regional economics, sports economics, World Cup, Stadium Impact
    JEL: L83 R53 R58
    Date: 2007–06
  2. By: António Miguel Martins (Faculdade de Economia da Universidade do Porto); Ana Paula Serra (Faculdade de Economia da Universidade do Porto)
    Abstract: This paper investigates the impact of international sporting and cultural events on national stock markets. We study market reaction to the announcements of the selected country hosting the Summer and Winter Olympic Games, the World Football Cup, the European Football Cup and World and Specialized Exhibitions. We also measure the market effects of the announcement of the nomination of the European Cultural City. First, we evaluate the abnormal returns of winning bidders at (and around) the announcement date using an event study methodology. We study the impact at market and industry-levels. Second, we analyze the determinants of the variation in abnormal returns across events and industries on the basis of a set of variables found important by previous studies and control for the prior probability of observing the event. Third, on the basis of a simple model of partial anticipation, we reexamine the abnormal returns observed for the winning and losing countries and perform a series of tests to disentangle the different theoretical arguments that could account for the observed stock market behavior. Our initial results suggest that the abnormal returns measured at the announcement date and around the event are not consistently different from zero. Further, when we look at particular industries, we find no evidence supporting that industries, that a priori were more likely to extract direct benefits from the event, observe positive significant effects. Yet when we control for the prior expectations, the announcement of these mega-events is associated with a positive market reaction in the nominated country and a negative reaction in the losing country. Overall we interpret our findings as supportive of rational asset pricing and partial anticipation.
    Keywords: Market efficiency; Event studies; Mega-events
    JEL: G31 G14 L83
    Date: 2007–06
  3. By: Kevin G. Quinn (St. Nobert College); Melissa Geier (St. Nobert College); Anne Berkovitz (St. Nobert College)
    Abstract: The National Football League constrains teams’ payrolls via a “salary cap.” We analyze how teams allocate cap spending across rosters using a data set of over 10,000 player-season observations during 2000-2005. We find that a few players account for relatively high portions of teams’ caps, and that the players’ “cap values” are consistent with both “superstar” and Yule-Simon income distributions. A theoretical model based on a utility function convex with respect to winning is used to explain this result. We also find that the cap has been substantially effective in reducing teams’ ability to “spend their way to championships.”
    Keywords: Sports, NFL, Draft, Quarterback, Productivity
    JEL: L83 J23 J42
    Date: 2007–06
  4. By: Dennis Coates (Department of Economics, University of Maryland, Baltimore County); David Gearhart (Department of Economics, University of Maryland, Baltimore County)
    Abstract: This paper evaluates the impact of NASCAR on the communities that have tracks and host races of the three most prominent series, Cup, Grand National, and Truck. We estimate models in which the rent on housing units is determined by characteristics of the house or apartment, of the neighborhood, and of the standard metropolitan statistical area. The evidence is that tracks and races are significant determinants of rents, especially on non-central city housing units. For those units, a track raises rents from 5 to 8%, a Cup series races raises it an additional 13%, a Grand National race about 6%. Truck races are associated with a small reduction in rents of about 2.5%.
    Keywords: tourism, economic impact, special events, NASCAR, auto racing
    JEL: L83
    Date: 2007–06
  5. By: Paserman, Marco Daniele
    Abstract: This paper uses data from nine tennis Grand Slam tournaments played between 2005 and 2007 to assess whether men and women respond differently to competitive pressure in a setting with large monetary rewards. In particular, it asks whether the quality of the game deteriorates as the stakes become higher. The paper conducts two parallel analyses, one based on aggregate set-level data, and one based on detailed point-by-point data, which is available for a selected subsample of matches in four of the nine tournaments under examination. The set-level analysis indicates that both men and women perform less well in the final and decisive set of the match. This result is robust to controls for the length of the match and to the inclusion of match and player-specific fixed effects. The drop in performance of women in the decisive set is slightly larger than that of men, but the difference is not statistically significant at conventional levels. On the other hand, the detailed point-by-point analysis reveals that, relative to men, women are substantially more likely to make unforced errors at crucial junctures of the match. Data on serve speed, on first serve percentages and on rally length suggest that women play a more conservative and less aggressive strategy as points become more important. I present a simple game-theoretic model that shows that a less aggressive strategy may be a player’s best response to an increase in the intrinsic probability of making unforced errors.
    Keywords: Gender differences; performance under pressure; tennis
    JEL: J16 J24 J71 L83 M50
    Date: 2007–06
  6. By: Panu Poutvaara (University of Helsinki and IZA); Mikael Priks (CES, University of Munich)
    Abstract: Hooliganism is on the rise and different countries use different strategies to combat it. We introduce a model where hooligans reap utility from violence and social identity and study the effects of different police strategies. We find that an increase in discriminative policing, provided by intelligence units, for example, always reduces violence. Under the right circumstances, it may also lead to larger supporter clubs and a significant drop in violence. Indiscriminate policing, such as the use of teargas or random jailing of potential law breakers, may, however, backfire and result in smaller and more brutal groups.
    Keywords: violence, hooliganism, identity, police
    JEL: D71 D74
    Date: 2007–05

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