Variable Ticket Pricing in Major League Baseball
AbstractSport teams have historically been reluctant to change ticket prices during the season. Recently, however, numerous sport organizations have implemented variable ticket pricing in an effort to maximize revenues. In Major League Baseball, variable pricing results in ticket price increases or decreases depending on factors such as quality of the opponent, day of the week, month of the year, and for special events such as opening day, Memorial Day and Independence Day (July 4). Using censored regression and elasticity analysis, this paper demonstrates that variable pricing would have yielded approximately $590,000 per year in additional ticket revenue for each Major League team in 1996, ceteris paribus. Accounting for capacity constraints, this amounts to only about a 2.8% increase above what occurs when prices are not varied. For the 1996 season, the largest revenue gain would have been the Cleveland Indians, who would have generated an extra $1.4 million in revenue. The largest percentage revenue gain would have been the San Francisco Giants. The Giants would have seen an estimated 6.7% increase in revenue had they used optimal variable pricing.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 25803.
Date of creation: 2007
Date of revision:
baseball; variable pricing; dynamic pricing; regression; censored regression;
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Daniel R. Marburger, 1997. "Optimal ticket pricing for performance goods," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 18(5), pages 375-381.
- Donald L. Alexander, 2001. "Major League Baseball: Monopoly Pricing and Profit-Maximizing Behavior," Journal of Sports Economics, , vol. 2(4), pages 341-355, November.
- 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.
- Rodney Fort, 2004. "Inelastic sports pricing," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 25(2), pages 87-94.
- Levy, Daniel, et al, 1997.
"The Magnitude of Menu Costs: Direct Evidence from Large U.S. Supermarket Chains,"
The Quarterly Journal of Economics, MIT Press,
MIT Press, vol. 112(3), pages 791-825, August.
- Daniel Levy & Mark Bergen & Shantanu Dutta & Robert Venable, 2005. "The Magnitude of Menu Costs: Direct Evidence from Large U.S. Supermarket Chains," Macroeconomics, EconWPA 0505012, EconWPA.
- Daniel, Rascher & Andrew, Schwarz, 2010. "Illustrations of Price Discrimination in Baseball," MPRA Paper 25807, University Library of Munich, Germany.
- Shapiro, Stephen L. & Drayer, Joris, 2014. "An examination of dynamic ticket pricing and secondary market price determinants in Major League Baseball," Sport Management Review, Elsevier, Elsevier, vol. 17(2), pages 145-159.
- Alan L. Morse & Stephen L. Shapiro & Chad D. McEvoy & Daniel A. Rascher, 2008.
"The Effects of Roster Turnover on Demand in the National Basketball Association,"
International Journal of Sport Finance,
Fitness Information Technology, vol. 3(1), pages 8-18, February.
- Alan, Morse & Stephen, Shapiro & Chad, McEvoy & Daniel, Rascher, 2008. "The Effects of Roster Turnover on Demand in the National Basketball Association," MPRA Paper 25828, University Library of Munich, Germany.
- Drayer, Joris & Rascher, Daniel A. & McEvoy, Chad D., 2012. "An examination of underlying consumer demand and sport pricing using secondary market data," Sport Management Review, Elsevier, Elsevier, vol. 15(4), pages 448-460.
- Tim Dittmer & Bob Carbaugh, 2014. "Major League Baseball: Dynamic Ticket Pricing and Measurement Costs," Journal for Economic Educators, Middle Tennessee State University, Business and Economic Research Center, Middle Tennessee State University, Business and Economic Research Center, vol. 14(1), pages 44-57, Fall.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.