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Taxing the Opposition: Cactus League Attendance and the Efficiency of the ‘Cubs Tax’

Author

Listed:
  • Michael C. Davis

    () (Missouri University of Science and Technology)

  • Craig Palsson

    () (Yale University)

  • Joseph Price

    () (Brigham Young University)

Abstract

In 2010, a plan to finance a new spring training stadium for the Cubs through a ticket surcharge on all games in the Cactus League was proposed. We find that the Cubs increase attendance when they are the away team by about 37%. Thus, the surcharge would be economically justified as long as the price elasticity of tickets is less than 0.32, which many prior studies find to be the case. This tax provides one of the few examples in which the cost of a subsidized stadium would be born primarily by the group that benefits the most from the arrival of the subsidized team.

Suggested Citation

  • Michael C. Davis & Craig Palsson & Joseph Price, 2013. "Taxing the Opposition: Cactus League Attendance and the Efficiency of the ‘Cubs Tax’," International Journal of Sport Finance, Fitness Information Technology, vol. 8(2), pages 157-170, May.
  • Handle: RePEc:jsf:intjsf:v:8:y:2013:i:2:p:157-170
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    References listed on IDEAS

    as
    1. Zou, Ning Ning (Helen) & Hobbs, Jill E., 2006. "Modelling functional food choice and health care impacts: A literature review," Consumer and Market Demand Network Papers 91556, University of Alberta, Department of Resource Economics and Environmental Sociology.
    2. Tim Pawlowski, 2013. "Testing the Uncertainty of Outcome Hypothesis in European Professional Football," Journal of Sports Economics, , vol. 14(4), pages 341-367, August.
    3. Simon Rottenberg, 1956. "The Baseball Players' Labor Market," Journal of Political Economy, University of Chicago Press, vol. 64, pages 242-242.
    4. Georg Stadtmann & Dirk Czarnitzki, 2002. "Uncertainty of outcome versus reputation: Empirical evidence for the First German Football Division," Empirical Economics, Springer, pages 101-112.
    5. Brad R. Humphreys, 2002. "Alternative Measures of Competitive Balance in Sports Leagues," Journal of Sports Economics, , vol. 3(2), pages 133-148, May.
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    More about this item

    Keywords

    baseball; stadiums; attendance; taxes;

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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