nep-spo New Economics Papers
on Sports and Economics
Issue of 2009‒11‒14
five papers chosen by
Joao Carlos Correia Leitao
Polytechnic Institute of Portalegre and Technical University of Lisbon

  1. A Contest Model of a Professional Sports League with Two-Sided Markets By Helmut Dietl; Tobias Duschl; Egon Franck; Markus Lang
  2. Wage and Employment Effects of the Olympic Games in Atlanta 1996 Reconsidered By Arne Feddersen; Wolfgang Maennig
  3. Sports Franchises, Stadiums, and City Livability: An Examination of Professional Sports and Crime Rates By Robert Baumann; Bryan Engelhardt; Victor Matheson; Taylor Ciavarra
  4. Driver Success in the NASCAR Sprint Cup Series: The Impact of Multi-Car Teams By Craig A. Depken, II; Larisa Mackey
  5. Participation, Spectatorship and Media Coverage in Sport By Dawson, P.; Downward, P.

  1. By: Helmut Dietl (Institute for Strategy and Business Economics, University of Zurich); Tobias Duschl (Institute for Strategy and Business Economics, University of Zurich); Egon Franck (Institute for Strategy and Business Economics, University of Zurich); Markus Lang (Institute for Strategy and Business Economics, University of Zurich)
    Abstract: This paper develops a model of a professional sports league with network externalities by integrating the theory of two-sided markets into a contest model. In professional team sports, leagues function as a platform that enables sponsors to interact with fans. In these league-mediated interactions, positive network effects operate from the fan market to the sponsor market, while negative network effects operate from the sponsor market to the fan market. Clubs react to these network effects by charging higher (lower) prices to sponsors (fans). Our analysis shows that the size of these network effects determines the level of competitive balance within the league. Traditional models, which do not take network externalities into account, under- or overestimate the actual level of competitive balance, which may lead to wrong policy decisions. Moreover, we show that clubs benefit from stronger combined network effects through higher profits. Finally, we derive policy recommendations for improving competitive balance by taking advantage of network externalities.
    Keywords: Competitive balance, contest, multisided market, network externalities, team sports league
    JEL: L11 L13 L83 M21
    Date: 2009–11
  2. By: Arne Feddersen (University of Hamburg); Wolfgang Maennig (University of Hamburg)
    Abstract: We estimate the economic effects of the 1996 Atlanta Olympic Games. Our difference in difference model checks for serial correlation and allows for a simultaneous test of level and trend effects, but otherwise follows HOTCHKISS, MOORE, & ZOBAY (2003) in this journal. We were not able to reconfirm their finding that the Games had significant positive employment effects. We do, however, reaffirm their result of no significant wage effects.
    Keywords: Olympic Games, sports economics, mega events
    JEL: H54 R12 L83
    Date: 2009–11
  3. By: Robert Baumann (Department of Economics, College of the Holy Cross); Bryan Engelhardt (Department of Economics, College of the Holy Cross); Victor Matheson; Taylor Ciavarra (Department of Economics, College of the Holy Cross)
    Abstract: We estimate the impact sporting events have on local crime rates using the technique developed in Arellano and Bond (2001). For events, we consider the presence of MLB, NBA, NFL, and NHL franchises as well as whether a city held one of the respective championships, the Olympics, or World Cup matches. We find little to no evidence that sporting events are correlated with either property or violent crime.
    Keywords: Crime, Sports Economics, Economic Impact
    JEL: L83 O18 R53
    Date: 2009–11
  4. By: Craig A. Depken, II (Belk College of Business, University of North Carolina - Charlotte); Larisa Mackey (Belk College of Business, University of North Carolina - Charlotte)
    Abstract: This paper explores the impact of multi-car teams on driver wins, total points, and total earnings in the NASCAR Sprint Cup Series for the years of 2005 through 2008. Early in NASCAR’s history, multi-car teams were rare as the conventional wisdom was that multi-car teams would have poor chemistry which would negatively impact driver performance. Recently, however, multi-car teams have become more popular. Using season-level data, we show that multi-car teams generally enjoy a competitive advantage on the track over single-car teams but that diminishing returns to the number of cars on a team mitigates the motivation for arbitrarily large teams.
    Keywords: peer effects, returns to scale, motor sports
    JEL: D23 L83 L25
    Date: 2009–11
  5. By: Dawson, P.; Downward, P.
    Abstract: This article considers the relationship between active participation in sport, sports spectatorship and television viewing habits using data from the 2005 DCMS Taking Part Survey. We find robust evidence that participation and sports spectatorship are symbiotically linked. In contrast, increase TV viewing per se leads to a reduction in participation.
    Keywords: sporting participation; spectator demand; count models;
    Date: 2009–09

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