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Using Revealed and Stated Preference Data to Estimate the Demand and Consumption Benefits of Sporting Events: An Application to National Hockey League Game Trips

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Author Info
John C. Whitehead
Bruce K. Johnson
Daniel S. Mason
Gordon J. Walker

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Abstract

This paper examines the demand for hockey game trips among metropolitan and non-metropolitan residents of Alberta, Canada. Using data on both revealed and stated preference game trip behaviour from a telephone survey conducted throughout Alberta, we estimate the effect of ticket prices, team quality, arena amenities, and capacity on the latent demand for NHL hockey. We find that lower ticket prices, higher team quality and additional capacity encourage attendance. The base case consumer surplus per game is $50 for those who had attended hockey games and about 50% less for those who had not attended games. Exploiting the stated preference data, we develop a number of other consumer surplus estimates. We also include travel costs in the estimation of the demand function and estimate the full value of the game trip considering both ticket prices and travel costs. Sold out arenas in Calgary and Edmonton generate annual consumption benefits of $40 and $35 million. Considering the full price consumer surplus for the Calgary Flames of $103 per game trip, the annual consumption benefits may be as high as $82 million. Key Words: Hockey demand, revealed preference, stated preference, consumer surplus

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Paper provided by Department of Economics, Appalachian State University in its series Working Papers with number 09-13.

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Date of creation: 2009
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Handle: RePEc:apl:wpaper:09-13

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Web page: http://www.business.appstate.edu/departments/economics/
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Find related papers by JEL classification:
R22 - Urban, Rural, and Regional Economics - - Household Analysis - - - Other Demand
L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Recreation; Tourism
D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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  1. Dehring, Carolyn A. & Depken II, Craig A. & Ward, Michael R., 2008. "A direct test of the homevoter hypothesis," Journal of Urban Economics, Elsevier, vol. 64(1), pages 155-170, July. [Downloadable!] (restricted)
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  2. John C. Whitehead & Subhrendu K. Pattanayak & George L. Van Houtven & Brett R. Gelso, 2008. "Combining Revealed And Stated Preference Data To Estimate The Nonmarket Value Of Ecological Services: An Assessment Of The State Of The Science," Journal of Economic Surveys, Blackwell Publishing, vol. 22(5), pages 872-908, December. [Downloadable!] (restricted)
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  3. Philip M. Clarke, 2002. "Testing the convergent validity of the contingent valuation and travel cost methods in valuing the benefits of health care," Health Economics, John Wiley & Sons, Ltd., vol. 11(2), pages 117-127. [Downloadable!]
  4. Coates, Dennis & Humphreys, Brad R., 2006. "Proximity benefits and voting on stadium and arena subsidies," Journal of Urban Economics, Elsevier, vol. 59(2), pages 285-299, March. [Downloadable!] (restricted)
  5. Alexander, Donald L. & Kern, William & Neill, Jon, 2000. "Valuing the Consumption Benefits from Professional Sports Franchises," Journal of Urban Economics, Elsevier, vol. 48(2), pages 321-337, September. [Downloadable!] (restricted)
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