nep-spo New Economics Papers
on Sports and Economics
Issue of 2009‒07‒03
ten papers chosen by
Joao Carlos Correia Leitao
Technical University of Lisbon

  1. The Economic Consequences of Foreigner Rules in National Sports Leagues By Markus Lang; Alexander Rathke; Marco Runkel
  2. The Combined Effect of Salary Restrictions and Revenue Sharing on Club Profits, Player Salaries, and Competitive Balance By Helmut Dietl; Markus Lang; Alexander Rathke
  3. Price, Income & Unemployment Effects on Greek Professional Football By Vassiliki Avgerinou; Stefanos Giakoumatos
  4. The Red Mist? Red Shirts, Aggression and Team Sports By David A.Savage; Benno Torgler; Marco Piatti
  5. The determinants of demand in football matches during the 2007 Brazilian Championship By Synthia Kariny Silva de Santana; Alexandre Stamford da Silva
  6. Does higher sport supply lead to higher sport demand? A city level analysis By Sandrine Poupaux; Christoph Breuer
  7. Race and the Likelihood of Managing in Major League Baseball By Brian Volz
  8. The Flexibility of the Workweek in the United States: Evidence from the FIFA World Cup By Lozano, Fernando A.
  9. Crime and Sport Participation in Itay: Evidence from Panel Data Regional Analysis over the Period 1997-2003.\ By Raul Caruso
  10. Why does the US dominate university league tables? By Mei Li; Sriram Shankar; Kam Ki Tang

  1. By: Markus Lang (Institute for Strategy and Business Economics, University of Zurich); Alexander Rathke (Institute for Empirical Research in Economics, University of Zurich); Marco Runkel (Faculty of Economics and Management, University of Magdeburg)
    Abstract: This paper provides a contest model of a professional team sports league and analyzes the impact of a restriction on foreign players. It shows that a league with binding restrictions on foreign talent for all clubs is more balanced than a league without binding restrictions on foreign talent. Moreover, the wage level of domestic (foreign) talent is higher (lower) in a league with a binding restriction on foreign players. Finally, a tighter restriction on foreign players increases profits of all clubs.
    Keywords: Team Sports Leagues, UEFA's Homegrown Rule, FIFA's 6+5 Rule, Competitive Balance, Player Salaries
    JEL: L83
    Date: 2009–06
  2. By: Helmut Dietl (Institute for Strategy and Business Economics, University of Zurich); Markus Lang (Institute for Strategy and Business Economics, University of Zurich); Alexander Rathke (Institute for Empirical Research in Economics, University of Zurich)
    Abstract: This article provides a standard "Fort and Quirk"-style model of a professional team sports league and analyzes the combined effect of salary restrictions (caps and floors) and revenue-sharing arrangements. It shows that the invariance proposition does not hold even under Walrasian conjectures if revenue sharing is combined with either a salary cap or a salary floor. In leagues with a binding salary cap for large clubs but no binding salary floor for small clubs, revenue sharing will decrease the competitive balance and increase club profits. Moreover, a salary cap produces a more balanced league and decreases the cost per unit of talent. The effect of a more restrictive salary cap on the profits of the small clubs is positive, whereas the effects on the profits of the large clubs as well as on aggregate profits are ambiguous. In leagues with a binding salary floor for the small clubs but no binding salary cap for the large clubs, revenue sharing will increase the competitive balance. Moreover, revenue sharing will decrease (increase) the profits of large (small) clubs. Implementing a more restrictive salary floor produces a less balanced league and increases the cost per unit of talent. Furthermore, a salary floor will result in lower profits for all clubs.
    Keywords: Team sports leagues, invariance proposition, competitive balance, revenue sharing, salary cap, salary floor
    JEL: C72 L11 L83
    Date: 2009–06
  3. By: Vassiliki Avgerinou (University of Peloponnese); Stefanos Giakoumatos (The Highest Institute for Technological Education of Kalamata)
    Abstract: Based on data of 26 Greek professional football clubs of Division A’ and B’ for 16 seasons (1991/92-2006/07), we investigate the effect of sporting and economic variables on the attendance in Greek football stadia. Price, income and unemployment are found to be statistically significant in the small Greek football market, while controlling for classic sporting determinants of demand such as success, entertainment and promotion/relegation. We include two more dummy variables; one for the new stadia constructed for the Olympic Games of 2004 and one for the enthusiasm effect of the EURO 2004 victory by the Greek National Team.
    Keywords: Greek Football, Football Demand, Attendance
    JEL: L83
    Date: 2009–06
  4. By: David A.Savage; Benno Torgler; Marco Piatti
    Abstract: Baron von Richthofen (aka the Red Baron) arguably the greatest fighter pilot of all time painted his plane in the vividest of red hues, making him visible and identifiable at great distance. An aggressive pronouncement of dominance to other pilots, but is it the colour that inspires greater performance or coincidence that red appears to perform better? This study explores the effect of the colour red on sporting performances in a team sport, through empirical analysis of match results from the Australian Rugby League spanning a period of 30 years. The results do not provide empirical evidence that teams with predominately red jerseys enjoy a ceteris paribus advantage over those wearing other colours. On the contrary, our multivariate analysis shows that teams wearing red experience a large negative relationship with victories.
    JEL: L83
    Date: 2009–06–26
  5. By: Synthia Kariny Silva de Santana (Departament of Economics, Federal University of Pernambuco); Alexandre Stamford da Silva (Departament of Economics, Federal University of Pernambuco)
    Abstract: In view of the structural changes experienced by Brazilian football as a whole, which is becoming better regulated and more transparently managed, it is necessary to examine the factors that now determine the attendance at football matches. This paper aims to examine the demand for tickets in the 2007 Brazilian Championship games, the main competition in that sport in the country, based on the methodology created by Souza and Angelo (2004), which conducted a study for the championship of 2002. The present study, using the Ordinary Least Squares method, showed that in 2007 the demand for football was price-inelastic, but no inference can be made with respect to income. Moreover, in general, the determinants were found to be steady.
    Keywords: microeconomics, economics of sports, theory of demand, attendance
    JEL: D12 L80 L83
    Date: 2009–06
  6. By: Sandrine Poupaux; Christoph Breuer
    Abstract: This paper explores the decision to participate in sports activities and the subsequent frequency of participation using data from a big German city, Munich, representative sample of individuals in 2008. Individual and socio-economic variables characterizing the individuals were collected. A new type of variable, which has not been included in the existing econometric studies yet, is introduced: the availability of sport infrastructures, including their geographical localization and the type of infrastructure. If building sport infrastructures can be seen as an investment and as a consequence a cost for the city, sport infrastructures can also be considered as a factor influencing positively the sport demand. However, the localization of such an infrastructure can be seen as a time and income constraint for the sport participant if the distance from the home is too important. Traditional non linear econometric analysis, logit and poisson models, as well as two-level nonlinear hierarchical models are used to examine the empirical evidence provided by the data collected by survey including 11.715 persons. The results suggest that social and individual characteristics are of paramount importance in determining sports participation and sports frequency, as shown in the 2 recent econometric studies based on UK and US data (Downward, 2007 and Humpreys and Ruseski, 2007). In our study related to the city Munich, we can see that the impact of the variable age is non linear, that the gender is highly significant in explaining the differences of sport participation and the impact of the level of school attendance on sport practice are significantly explanatory. A very interesting result is the explanatory power of the variable ethnicity, or nationality of the person and we take a particular attention on it. The regression coefficients related to different nationalities differs among sport disciplines. These differences could be explained no only by sociological reasons, but also by economic reasons, among other things. The economic variables, taking alone, particularly the monthly income of the person interweaved, have a lower impact on both the decision to practice sport and the frequency of the sport activity. The most innovative result of our econometric study is to state, through an analysis of each kind of sport infrastructures, that the sport practice supply in an acceptable distance from the individual home has a significant and positive impact on both the decision of practicing a sport and on the frequency of this activity. These results, related to the city Munich, open an alternative way of considering the urban sport demand. Such a study could allow predicting the outcomes of political decisions in the domain of sport for all at the city level, the econometrical models using there being able to predict on how many percent the sport participation would increase if a new sport infrastructure would be built.
    Keywords: Sports
    JEL: L83
    Date: 2009–06
  7. By: Brian Volz (University of Connecticut)
    Abstract: The effects of race on the probability of former Major League Baseball players becoming managers are analyzed using probit models with sample selection correction. The models are estimated using data on the performance and personal characteristics of players from 1955 to 2007. It is shown that given the same performance, personal characteristics, and popularity black former players are 70 to 82 percent less likely to become Major League managers than white former players. It is also shown that being Hispanic does not have a significant effect on the probability of becoming a manager. Additionally, it is observed that catchers and shortstops who are popular but not necessarily good players are most likely to become managers.
    Keywords: Baseball, Management, Race, Discrimination
    JEL: J71 L83
    Date: 2009–06
  8. By: Lozano, Fernando A. (Pomona College)
    Abstract: In this paper I explore the flexibility of the work week in the United States, using the FIFA Soccer World Cup as a natural experiment. My empirical strategy exploits the exogenous variation that arises due to which country hosts the World Cup, as this will determine the time games are broadcast across different time zones in the United States. The hour of the day when games are broadcast differentially affects hours of work across different time zones. Further, the calendar timing of the World Cup allows me to compare labor market outcomes in June/July for a worker in World Cup year t, with the outcomes in June/July for a worker in non-World Cup years t + 1, t + 2 and t + 3. My results highlight the importance of the worker's pay frequency in their work week flexibility, as all differences in hours of work due to the World Cup are concentrated among salary paid workers, while hourly paid workers do not change their market hours during the World Cup. Also, my results show that after controlling for observable demographic characteristics as well as year and month fixed effects, a worker reduces on average his weekly number of hours of work during the World Cup by statistically significant estimates that range from 9 weekly minutes to 28 weekly minutes, depending on specification choice and time of the day during which World Cup games are broadcast live in the U.S.
    Keywords: hours of work, schedule flexibility, FIFA World Cup
    JEL: J22 L83
    Date: 2009–06
  9. By: Raul Caruso (Institute of Economic Policy, Università Cattolica del Sacro Cuore di Milano)
    Abstract: What is the broad impact of sport participation and sport activities in a society? The first aim of this paper is tackling this crucial point by studying whether or not there is a relationship between sport participation and crime. A panel dataset have been constructed for the twenty Italian regions over the period 1997-2003. The impact of spot participation on different type of crimes has been studied. Results show that: (i) there is a robust negative association between sport participation and property crime; (ii) There is a robust negative association between sport participation and juvenile crime; (iii) There is a positive association between sport participation and violent crime, but it is only weakly significant.
    Keywords: Sport participation, relational goods, crime
    JEL: L83 D62
    Date: 2009–06
  10. By: Mei Li; Sriram Shankar; Kam Ki Tang (School of Economics, The University of Queensland)
    Abstract: According to Academic Ranking of World Universities, the world’s top 500 universities are owned by only 38 countries, with the US alone having 157 of them. This paper investigates the socioeconomic determinants of the wide performance gap between countries and whether the US’s dominance in the league table is largely due to its economic power or something else. It is found that a large amount of cross country variation in university performance can be explained by just four socioeconomic factors: income, population size, R&D spending, and the national language. It is also found that conditional on the resources that it has, the US is actually underperforming by about 4 to 10 percent.
    Date: 2009

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