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Testing for competitive balance

Author

Listed:
  • Lee Scyoc

    (University of Wisconsin - Oshkosh)

  • M. Kevin McGee

    () (University of Wisconsin - Oshkosh)

Abstract

Abstract We present two tests for the hypothesis that a league is competitively balanced, identifying in each case the appropriate statistic as well as its sampling distribution. We then apply these tests to Major League Baseball and the National Football League. We demonstrate how these tests can be applied to full sports leagues, or to just intradivisional play, and to both single season and multiple season outcomes. We also show how one of our statistics is related to existing measures of competitive balance, and note the possibility that, because our statistics have known sampling distributions, knowledge may ultimately allow them to be transformed into measures that are comparable between leagues of different sizes and season lengths.

Suggested Citation

  • Lee Scyoc & M. Kevin McGee, 2016. "Testing for competitive balance," Empirical Economics, Springer, vol. 50(3), pages 1029-1043, May.
  • Handle: RePEc:spr:empeco:v:50:y:2016:i:3:d:10.1007_s00181-015-0968-1
    DOI: 10.1007/s00181-015-0968-1
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    References listed on IDEAS

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    1. Jeffery Borland, 2003. "Demand for Sport," Oxford Review of Economic Policy, Oxford University Press, vol. 19(4), pages 478-502, Winter.
    2. Owen, P. Dorian, 2010. "Limitations of the relative standard deviation of win percentages for measuring competitive balance in sports leagues," Economics Letters, Elsevier, vol. 109(1), pages 38-41, October.
    3. Vani K. Borooah & John Mangan, 2012. "Measuring competitive balance in sports using generalized entropy with an application to English premier league football," Applied Economics, Taylor & Francis Journals, vol. 44(9), pages 1093-1102, March.
    4. Lenten, Liam J.A., 2011. "The extent to which unbalanced schedules cause distortions in sports league tables," Economic Modelling, Elsevier, vol. 28(1), pages 451-458.
    5. Rodney Fort & James Quirk, 1995. "Cross-subsidization, Incentives, and Outcomes in Professional Team Sports Leagues," Journal of Economic Literature, American Economic Association, vol. 33(3), pages 1265-1299, September.
    6. Rodney Fort & James Quirk, 2010. "Optimal Competitive Balance in Single-Game Ticket Sports Leagues," Journal of Sports Economics, , vol. 11(6), pages 589-601, December.
    7. P. Owen & Michael Ryan & Clayton Weatherston, 2007. "Measuring Competitive Balance in Professional Team Sports Using the Herfindahl-Hirschman Index," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 31(4), pages 289-302, December.
    8. 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.
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    Cited by:

    1. Dorian Owen & Caitlin Owen, 2017. "Simulation Evidence on Herfindahl-Hirschman Indices as Measures of Competitive Balance," Working Papers 1715, University of Otago, Department of Economics, revised Dec 2017.

    More about this item

    Keywords

    Sports; Sampling;

    JEL classification:

    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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