nep-spo New Economics Papers
on Sports and Economics
Issue of 2013‒07‒28
four papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Competitive Balance Measures in Sports Leagues: The Effects of Variation in Season Length By P Dorian Owen; Nicholas King
  2. Does Match Uncertainty Increase Attendance? A Non-Regression Approach By Lahvicka, Jiri
  3. Is Financial Fair Play really justified? An economic and legal assessment of UEFA's Financial Fair Play rules By Vöpel, Henning
  4. Does the Three-Point Rule Make Soccer More Exciting? Evidence from a Regression Discontinuity Design By Lee, Yoong Hon; Parinduri, Rasyad

  1. By: P Dorian Owen (University of Otago); Nicholas King (University of Otago)
    Abstract: Appropriate measurement of competitive balance is a cornerstone of the economic analysis of professional sports leagues. We examine the distributional properties of the ratio of standard deviations (RSD) of points percentages, the most widely used measure of competitive balance in the sports economics literature, in comparison with other standard-deviation-based measures. Simulation methods are used to evaluate the effects of changes in season length on the distributions of competitive balance measures for different distributions of the strengths of teams in a league. The popular RSD measure performs as expected only in cases of perfect balance; if there is imbalance in team strengths, its distribution is very sensitive to changes in season length. This has important implications for comparisons of competitive balance for different sports leagues with different numbers of teams and/or games played.
    Keywords: Competitive balance, Idealized standard deviation, Ratio of standard, deviations, Season length, Sports economics, Simulation
    JEL: L83 D63 C63
    Date: 2013–07–24
  2. By: Lahvicka, Jiri
    Abstract: The uncertainty of outcome hypothesis predicts that more balanced sports matches should attract higher attendances, but the empirical evidence is mixed at best. First, this article shows that the inconsistent findings in the literature could be explained by wrongly specified regressions. Second, a new approach to analyzing the effect of match uncertainty is proposed. Using data about nine seasons of the English Championship, the article shows that in a pair of matches where both home teams are slight favorites, a switch of the corresponding away teams would decrease the total attendance by several percent, while the opposite is true if both home teams are underdogs or strong favorites. These results suggest that attendance demand is a bell-shaped function of match balance that is maximized if teams of the same quality play against each other.
    Keywords: uncertainty of outcome; soccer; attendance demand
    JEL: D12 L83
    Date: 2013–07–23
  3. By: Vöpel, Henning
    Abstract: There is an ongoing debate on how Financial Fair Play (FFP) will affect European club football and whether it is really fair. So far regulations have been very different among national leagues. Therefore, FFP is expected to trigger some asymmetric adjustments among clubs and leagues thereby leading to some changes in the competitive balance and probably to a new competitive equilibrium in European club football in an inter- as well as in an intra-league comparison. The Paper discusses to what regard and to what extent FFP rules are really needed to remedy market failure and whether these rules are legitimate or justifiable with respect to their objectives and potential conflicts with EU competition law. --
    Date: 2013
  4. By: Lee, Yoong Hon; Parinduri, Rasyad
    Abstract: We examine whether the three-point rule—the increase in rewards for a win from two- to three points that FIFA adopted in 1995—makes Bundesliga games become more exciting. Using regression discontinuity design as the empirical strategy, we do not find evidence that the three-point rule makes games more decisive, increases the number of goals, or decreases goal differences. We only find some evidence that the three-point rule increases the second-half goals of losing first-half teams. Overall, our results suggest that, in the case of Bundesliga games, the three-point rule does not work as FIFA intended.
    Keywords: three-point rule; soccer; regression discontinuity design
    JEL: C23 D01 L83
    Date: 2013

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