Tuesday, June 19, 2012

Why Sports and Sports Economics Matter

A recent article on Forbes.com highlights research I did with my Towson colleague Tom Rhoads on the impact of stadium construction on minor league baseball attendance (download the paper here) in short as the article says we find that over a 10 year period that a new stadium can increase AAA (the top minor league level) attendance by roughly 1.2 million fans over the 10 years and that attendance is still 5-10% higher ten years later.

Rereading the paper (which I'm doing now as I prepare revisions requests for referees at a journal), we seem to back a little away from the idea that the construction doesn't pay off. Although our analysis indicates that it might not increase ticket sales enough at AA or A to offset construction cost, but at the AAA the returns to increased attendance might approach construction cost. Recent work by Nola Agha shows that having minor league teams may actually increase local income. This is counter to one of the main tenants of sports economics is that subsidies to professional teams don't pay off (Coates and Humphreys have a good review article).

So why does sports and sports economics matter I was listening to an interview with Frank Deford on TBTL (my favorite podcast), Deford said something to the effect that sports are important because they are part of the basic human condition. Almost all societies have as he claimed some type of game or sport (like they do religion).  Sports draw our interest in and makes talking about local government subsidies actually interesting (yes even an economist needs motivation to think about these isuees). My guess is that much larger subsidies are given in other context, but receive less attention from researchers.

Sports Economics can be used to show evidence of racial discrimination (Price and Wolfers) and  (Parsons et al.)  and be used to show the best way to set up an incentive structure (Ferral and Smith) and (Fort and Quick). So it has shown to be able to address important topics. So in that sense it matters. 

Most of the time I think of myself as an economist who studies international development who does some sports research on the side. It seems easier to think why increasing schooling or improving nutrition in Nicaragua matter more than how many fans attend a baseball game in a new stadium in Toledo. But one needs to keep motivated, and studying sports is fun and it keeps the authors going. As I see papers in a couple of weeks at the Western Economics meetings which features dozens of papers on sports economics sponsored by the North American Association of Sports Economics, I'll keep in mind why does this matter outside of the world of sports and what can it tell us about the human condition.

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1 comment:

uii profile said...

I would like to thank you for the efforts you have made in writing this article
nice post, that's very interesting information thanks for sharing :)
I introduce a Economics student in Islamic University of Indonesia Yogyakarta

twitter : @profiluii