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Do Soccer Associations Really Spend on a Good Thing? Empirical Evidence on Heterogeneity in the Consumer Response to Match Uncertainty of Outcome

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Author Info

  • Men-Andri Benz
  • Leif Brandes
  • Egon Franck

    ()
    (Institute for Strategy and Business Economics, University of Zurich
    Institute for Strategy and Business Economics, University of Zurich
    Institute for Strategy and Business Economics, University of Zurich)

Abstract

The purpose of this study is to analyze whether previous results describing the effect of uncertainty of outcome on match attendance in team sports have been driven by heterogeneity in fan demand. We apply censored quantile regression methods and place particular emphasis on the relationship between match uncertainty and attendance demand, as previous results are highly ambiguous. This is the more surprising as each season association and league officials continue to spend millions on enhancing this uncertainty. We also control for season ticket holders, who are unlikely to be influenced by match specificities. Based on data from German soccer, our results indicate that fan demand shows heterogeneity across quantiles and that increasing match uncertainty of outcome exclusively benefits teams who already face strong attendance demand.

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Bibliographic Info

Paper provided by University of Zurich, Institute for Strategy and Business Economics (ISU) in its series Working Papers with number 0048.

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Length: 35 pages
Date of creation: 2006
Date of revision: 2008
Publication status: forthcoming in: Contemporary Economic Policy
Handle: RePEc:iso:wpaper:0048

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Keywords: heterogeneous fan demand; censored quantile regression;

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References

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  1. Daniel, Rascher, 1999. "A Test of the Optimal Positive Production Network Externality in Major League Baseball," MPRA Paper 25832, University Library of Munich, Germany.
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  5. Whitney, James D, 1988. "Winning Games versus Winning Championships: The Economics of Fan Interest and Team Performance," Economic Inquiry, Western Economic Association International, vol. 26(4), pages 703-24, October.
  6. B Buraimo & R Simmons, 2006. "Market size and attendance in English Premier League football," Working Papers 574562, Lancaster University Management School, Economics Department.
  7. McDonald, Mark & Rascher, Daniel, 2000. "Does Bat Day Make Cents? The Effect of Promotions on the Demand for Major League Baseball," MPRA Paper 25739, University Library of Munich, Germany.
  8. Baimbridge, Mark & Cameron, Samuel & Dawson, Peter, 1996. "Satellite Television and the Demand for Football: A Whole New Ball Game?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 43(3), pages 317-33, August.
  9. David Peel & Dennis Thomas, 1996. "Attendance demand: an investigation of repeat fixtures," Applied Economics Letters, Taylor & Francis Journals, vol. 3(6), pages 391-394.
  10. Jeffery Borland, 2003. "Demand for Sport," Oxford Review of Economic Policy, Oxford University Press, vol. 19(4), pages 478-502, Winter.
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  12. Jones, J C H & Ferguson, D G, 1988. "Location and Survival in the National Hockey League," Journal of Industrial Economics, Wiley Blackwell, vol. 36(4), pages 443-57, June.
  13. Michael Hynds & Ian Smith, 1994. "The demand for test match cricket," Applied Economics Letters, Taylor & Francis Journals, vol. 1(7), pages 103-106.
  14. Peel, David A & Thomas, Dennis A, 1992. "The Demand for Football: Some Evidence on Outcome Uncertainty," Empirical Economics, Springer, vol. 17(2), pages 323-31.
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Cited by:
  1. Coates, Dennis & Humphreys, Brad & Zhou, Li, 2012. "Outcome Uncertainty, Reference-Dependent Preferences and Live Game Attendance," Working Papers 2012-7, University of Alberta, Department of Economics.
  2. Lahvicka, Jiri, 2010. "Attendance of ice hockey matches in the Czech Extraliga," MPRA Paper 27653, University Library of Munich, Germany.
  3. Leif Brandes & Egon Franck & Philipp Theiler, 2013. "The group size and loyalty of football fans: a two-stage estimation procedure to compare customer potentials across teams," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 176(2), pages 347-369, 02.
  4. Humphreys, Brad R. & Paul, Rodney J. & Weinbach, Andrew P., 2013. "Consumption benefits and gambling: Evidence from the NCAA basketball betting market," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 376-386.
  5. Lahvicka, Jiri, 2013. "Does Match Uncertainty Increase Attendance? A Non-Regression Approach," MPRA Paper 48571, University Library of Munich, Germany.
  6. Nicholas King & P. Dorian Owen & Rick Audas, 2010. "Playoff Uncertainty, Match Uncertainty and Attendance at Australian National Rugby League Matches," Working Papers 1007, University of Otago, Department of Economics, revised Aug 2010.
  7. Dominik Scheyer & Sascha L. Schmidt & Benno Torgler, 2013. "Any Given Sunday: How Season Ticket Holders' Time of Stadium Entrance Is Influenced by Outcome Uncertainty," QuBE Working Papers 024, QUT Business School.
  8. Lahvicka, Jiri, 2012. "Using Monte Carlo simulation to calculate match importance: the case of English Premier League," MPRA Paper 40998, University Library of Munich, Germany.
  9. Pawlowski, Tim & Budzinski, Oliver, 2014. "Competitive balance and attention level effects: Theoretical considerations and preliminary evidence," Ilmenau Economics Discussion Papers 84, Ilmenau University of Technology, Institute of Economics.

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