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The Utility of Sport and Returns to Ownership


  • Frank A. Gamrat

    (Allegheny Institute)

  • Raymond D. Sauer

    (Clemson University,


The rate of return to investment in thoroughbred racehorses is widely believed to be negative on average. In a world of fully informed market participants, this implies that ownership of a racehorse is motivated in part by nonfinancial attributes, perhaps a taste for sport. This article presents simple models of the utility derived from sporting competition. The models differ in their implications for the rate of return to racehorse ownership and its variation with the level of talent. Evidence from thoroughbred auctions and racing earnings are used to test between the models.

Suggested Citation

  • Frank A. Gamrat & Raymond D. Sauer, 2000. "The Utility of Sport and Returns to Ownership," Journal of Sports Economics, , vol. 1(3), pages 219-235, August.
  • Handle: RePEc:sae:jospec:v:1:y:2000:i:3:p:219-235

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    Cited by:

    1. Hartmann, Laura & Spiller, Achim, 2015. "Luxusaffinität deutscher Reitsportler: Implikationen für das Marketing im Reitsportsegment," DARE Discussion Papers 1501, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
    2. Paul Madden, 2012. "Welfare Economics of "Financial Fair Play" in a Sports League With Benefactor Owners," The School of Economics Discussion Paper Series 1221, Economics, The University of Manchester.
    3. Hartmann, Laura & Spiller, Achim, 2015. "Luxusaffinität deutscher Reitsportler - Implikationen für das Marketing im Reitsportsegment," Department of Agricultural and Rural Development (DARE) Discussion Papers 260785, Georg-August-Universitaet Goettingen, Department of Agricultural Economics and Rural Development (DARE).

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