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Competitive Balance Measures in Sports Leagues: The Effects of Variation in Season Length

  • P. Dorian Owen

    ()

    (Department of Economics, University of Otago, New Zealand)

  • Nicholas King

    (Department of Economics, University of Otago, New Zealand)

Appropriate measurement of competitive balance is a cornerstone of the economic analysis of professional sports leagues. We examine the distributional properties of the ratio of standard deviations (RSD) of points percentages, the most widely used measure of competitive balance in the sports economics literature, in comparison with other standard-deviation-based measures. Simulation methods are used to evaluate the effects of changes in season length on the distributions of competitive balance measures for different distributions of the strengths of teams in a league. The popular RSD measure performs as expected only in cases of perfect balance; if there is imbalance in team strengths, its distribution is very sensitive to changes in season length. This has important implications for comparisons of competitive balance for different sports leagues with different numbers of teams and/or games played.

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File URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_1309.pdf
File Function: First version, 2013
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Paper provided by University of Otago, Department of Economics in its series Working Papers with number 1309.

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Length: 39 pages
Date of creation: Jul 2013
Date of revision: Jul 2013
Handle: RePEc:otg:wpaper:1309
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  1. P. Owen & Michael Ryan & Clayton Weatherston, 2007. "Measuring Competitive Balance in Professional Team Sports Using the Herfindahl-Hirschman Index," Review of Industrial Organization, Springer, vol. 31(4), pages 289-302, December.
  2. Trandel Gregory A & Maxcy Joel G, 2011. "Adjusting Winning-Percentage Standard Deviations and a Measure of Competitive Balance for Home Advantage," Journal of Quantitative Analysis in Sports, De Gruyter, vol. 7(1), pages 1-17, January.
  3. 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.
  4. Koning, Ruud H. & Koolhaas, Michael & Renes, Gusta, 2001. "A simulation model for football championships," Research Report 01A65, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
  5. Oscar Bajo & Rafael Salas, 2002. "Inequality foundations of concentration measures: An application to the Hannah-Kay indices," Spanish Economic Review, Springer, vol. 4(4), pages 311-316.
  6. Kelly Goossens, 2006. "Competitive balance in european football: comparison by adapting measures: national measure of seasonal imbalance and Top 3," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 2(2), pages 77-122, Dicembre.
  7. Dobson, Stephen & Goddard, John, 2010. "Optimizing strategic behaviour in a dynamic setting in professional team sports," European Journal of Operational Research, Elsevier, vol. 205(3), pages 661-669, September.
  8. Martin B. Schmidt & David J. Berri, 2003. "On the Evolution of Competitive Balance: The Impact of an Increasing Global Search," Economic Inquiry, Western Economic Association International, vol. 41(4), pages 692-704, October.
  9. Puterman Martin L & Wang Qingchen, 2011. "Optimal Dynamic Clustering Through Relegation and Promotion: How to Design a Competitive Sports League," Journal of Quantitative Analysis in Sports, De Gruyter, vol. 7(2), pages 1-34, May.
  10. Craig Depken, 1999. "Free-Agency and the Competitiveness of Major League Baseball," Review of Industrial Organization, Springer, vol. 14(3), pages 205-217, May.
  11. Nicholas King & P. Dorian Owen & Rick Audas, 2012. "Playoff Uncertainty, Match Uncertainty and Attendance at Australian National Rugby League Matches," The Economic Record, The Economic Society of Australia, vol. 88(281), pages 262-277, 06.
  12. Scarf, Philip & Yusof, Muhammad Mat & Bilbao, Mark, 2009. "A numerical study of designs for sporting contests," European Journal of Operational Research, Elsevier, vol. 198(1), pages 190-198, October.
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  15. Rodney Fort & Young Hoon Lee, 2007. "Structural Change, Competitive Balance, And The Rest Of The Major Leagues," Economic Inquiry, Western Economic Association International, vol. 45(3), pages 519-532, 07.
  16. P. Dorian Owen, 2012. "Measuring Parity in Sports Leagues With Draws," Journal of Sports Economics, , vol. 13(1), pages 85-95, February.
  17. Stephen Dobson & John Goddard & John Wilson, 2001. "League Structure and Match Attendances in English Rugby League," International Review of Applied Economics, Taylor & Francis Journals, vol. 15(3), pages 335-351.
  18. Rodney Fort & James Quirk, 2011. "Optimal Competitive Balance In A Season Ticket League," Economic Inquiry, Western Economic Association International, vol. 49(2), pages 464-473, 04.
  19. 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.
  20. Jeffery Borland, 2003. "Demand for Sport," Oxford Review of Economic Policy, Oxford University Press, vol. 19(4), pages 478-502, Winter.
  21. 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.
  22. Simon Rottenberg, 1956. "The Baseball Players' Labor Market," Journal of Political Economy, University of Chicago Press, vol. 64, pages 242.
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