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Measurement of competitive balance in professional team sports using the Normalized Concentration Ratio

Author

Listed:
  • Vasileios Manasis

    () (University of Peloponnese)

  • Vassiliki Avgerinou

    () (University of Peloponnese)

  • Ioannis Ntzoufras

    () (Athens University of Economics and Business)

  • J. James Reade

    () (University of Birmingham)

Abstract

Competitive balance is an important concept in professional team sports; its measurement is, therefore, a critical issue. One of the most widely used indices, which was introduced for the estimation of seasonal competitive balance is the Concentration Ratio, which is a relatively simple index and measures the extent to which a league is dominated by a particular number of teams. However, it is shown that both the total number of league teams and the number of dominant teams under examination affects the index's boundaries, which results in a misleading interpretation concerning the level of competitive balance. Thus, we introduce the Normalized Concentration Ratio for the study of competitive balance across leagues or seasons.

Suggested Citation

  • Vasileios Manasis & Vassiliki Avgerinou & Ioannis Ntzoufras & J. James Reade, 2011. "Measurement of competitive balance in professional team sports using the Normalized Concentration Ratio," Economics Bulletin, AccessEcon, vol. 31(3), pages 2529-2540.
  • Handle: RePEc:ebl:ecbull:eb-11-00609
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I3-P227.pdf
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    References listed on IDEAS

    as
    1. 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 1302-1319, Nov.-Dec..
    2. Craig Depken, 1999. "Free-Agency and the Competitiveness of Major League Baseball," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 14(3), pages 205-217, May.
    3. Loek Groot, 2008. "Economics, Uncertainty and European Football," Books, Edward Elgar Publishing, number 12924, September.
    4. Joshua Utt & Rodney Fort, 2002. "Pitfalls to Measuring Competitive Balance With Gini Coefficients," Journal of Sports Economics, , vol. 3(4), pages 367-373, November.
    5. J.A. Bikker & K. Haaf, 2000. "Measures of competition and concentration in the banking industry: a review of the literature," Research Series Supervision (discontinued) 27, Netherlands Central Bank, Directorate Supervision.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Dorian Owen, 2014. "Measurement of competitive balance and uncertainty of outcome," Chapters,in: Handbook on the Economics of Professional Football, chapter 3, pages 41-59 Edward Elgar Publishing.
    2. P. Dorian Owen & Nicholas King, 2015. "Competitive Balance Measures In Sports Leagues: The Effects Of Variation In Season Length," Economic Inquiry, Western Economic Association International, vol. 53(1), pages 731-744, January.
    3. James Reade, 2014. "Detecting corruption in football," Chapters,in: Handbook on the Economics of Professional Football, chapter 25, pages 419-446 Edward Elgar Publishing.
    4. repec:qut:auncer:2013_04 is not listed on IDEAS
    5. Meletakos, Panagiotis & Chatzicharistos, Dimitrios & Apostolidis, Nikolaos & Manasis, Vasilios & Bayios, Ioannis, 2016. "Foreign players and competitive balance in Greek basketball and handball championships," Sport Management Review, Elsevier, vol. 19(4), pages 391-401.
    6. John Goddard & Peter Sloane (ed.), 2014. "Handbook on the Economics of Professional Football," Books, Edward Elgar Publishing, number 14821, September.

    More about this item

    Keywords

    competitive balance; concentration ratio; professional sports; sport league;

    JEL classification:

    • C0 - Mathematical and Quantitative Methods - - General
    • L0 - Industrial Organization - - General

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