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Who made Who? An Empirical Analysis of Competitive Balance in European Soccer Leagues

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Author Info

  • Leif Brandes
  • Egon Franck

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

Abstract

There is an on-going debate about the optimal degree of team solidarity in professional European soccer leagues. Support for a high degree of team solidarity has been coming from the theory of competitive balance. Within this theory, attendance has always been referred to as the endogenous variable, stating that diminished uncertainty of outcome will result in a lack of attendance demand. This paper takes a new approach towards the relation between competitive balance and attendance demand. First, we show why this relationship might be reversed. Based on seasonal average match attendance and different measures of competitive balance for several soccer leagues in Europe, this paper then presents results using vector autoregressive models and Granger causality tests. Regarding the analyzed relationship, our results clearly show the existence of heterogeneity across different leagues and for tiers within a league.

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Bibliographic Info

Paper provided by University of Zurich, Center for Research in Sports Administration (CRSA) in its series Working Papers with number 0004.

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Length: 24 pages
Date of creation: 2005
Date of revision: 2006
Publication status: Published in: Eastern Economic Journal 2007, Vol. 33, No. 3, pp. 379-403.
Handle: RePEc:rsd:wpaper:0004

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Keywords: competitive balance; sports leagues; Granger Causality; VAR models;

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References

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  1. S. Illeris & G. Akehurst, 2001. "Introduction," The Service Industries Journal, Taylor & Francis Journals, vol. 21(1), pages 1-4, January.
  2. Georg Stadtmann & Dirk Czarnitzki, 2002. "Uncertainty of outcome versus reputation: Empirical evidence for the First German Football Division," Empirical Economics, Springer, vol. 27(1), pages 101-112.
  3. Jeffery Borland, 2003. "Demand for Sport," Oxford Review of Economic Policy, Oxford University Press, vol. 19(4), pages 478-502, Winter.
  4. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
  5. Brad R. Humphreys, 2002. "Alternative Measures of Competitive Balance in Sports Leagues," Journal of Sports Economics, , vol. 3(2), pages 133-148, May.
  6. Babatunde Buraimo & David Forrest & Robert Simmons, 2007. "Freedom of Entry, Market Size, and Competitive Outcome: Evidence from English Soccer," Southern Economic Journal, Southern Economic Association, vol. 74(1), pages 204-213, July.
  7. Stefan Szymanski, 2003. "The Economic Design of Sporting Contests," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1137-1187, December.
  8. El-Hodiri, Mohamed & Quirk, James, 1971. "An Economic Model of a Professional Sports League," Journal of Political Economy, University of Chicago Press, vol. 79(6), pages 1302-19, Nov.-Dec..
  9. Helmut Dietl & Egon Franck & Patrick, 2003. "Überinvestitionsprobleme in einer Sportliga," Working Papers 0020, University of Zurich, Institute for Strategy and Business Economics (ISU).
  10. Stephen Hall & Stefan Szymanski & Andrew S. Zimbalist, 2002. "Testing the Causality between Team Performance and Payroll: The Cases of Major League Baseball and English Soccer," Journal of Sports Economics, , vol. 3(2), pages 149-168, May.
  11. Haan, Marco & Koning, Ruud H. & Witteloostuijn, Arjen van, 2002. "Market forces in European soccer," CCSO Working Papers 200211, University of Groningen, CCSO Centre for Economic Research.
  12. Scully, Gerald W., 1995. "The Market Structure of Sports," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226743950, March.
  13. S. M. Dobson & J. A. Goddard, 1998. "Performance and revenue in professional league football: evidence from Granger causality tests," Applied Economics, Taylor & Francis Journals, vol. 30(12), pages 1641-1651.
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Cited by:
  1. Raul Caruso, 2008. "Il calcio tra mercato, relazioni e coercizione," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 4(1), pages 71-88, Aprile.
  2. Raul Caruso & Marco Di Domizio, 2012. "Hooliganism and demand for football in Italy. Evidence for the period 1962-2011," DISCE - Quaderni dell'Istituto di Politica Economica ispe0062, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  3. P. Dorian Owen, 2013. "Measurement of Competitive Balance and Uncertainty of Outcome," Working Papers 1311, University of Otago, Department of Economics, revised Aug 2013.
  4. Raul Caruso & Marco Di Domizio, 2012. "Domanda Di Calcio E Violenza Negli Stadi: Un’Analisi Panel Sulla Serie A," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 8(2), pages 41-66, settembre.
  5. P. Dorian Owen, 2010. "Measuring Parity in Sports Leagues with Draws: Further Comments," Working Papers 1005, University of Otago, Department of Economics, revised Jul 2010.

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