Brad R. Humphreys

Alternative Measures of Competitive Balance in Sports Leagues

The most commonly used measures of competitive balance in sports leagues do not capture season-to-season changes in relative standings. This article describes an alternative measure of competitive balance, the Competitive Balance Ratio (CBR), that reflects team specific variation in winning percentage over time and league-specific variation. Based on estimation of a model of the determination of annual attendance in professional baseball during the past 100 years, variation in the CBR explains more of the observed variation in attendance than other alternatives measures of competitive balance, suggesting that CBR is a useful metric.

The Growth Effects of Sport Franchises, Stadia and Arenas

This paper investigates the relationship between professional sports franchises and venues and real per capita personal income in 37 Standard Metropolitan Statistical Areas in the United States over the period 1969-1994. Our empirical framework accounts for the entry and departure of professional football, basketball and baseball franchises; the construction of arenas and stadia; and other sports-related factors over this time period. In contrast to other existing studies, we find evidence that some professional sports franchises reduce the level of per capita personal income in metropolitan areas and have no effect on the growth in per capita income, casting doubt on the ability of a new sports franchise or facility to spur economic growth. We also find evidence that results obtained from estimating reduced form relationships, a common practice in the literature, are not robust to alternative statistical model specifications.

The effect of professional sports on earnings and employment in the services and retail sectors in US cities

Abstract This paper explores the impact of professional sports teams and stadiums on employment and earnings in specific sectors in US cities. Previous research focused on aggregate measures of income or employment. We find that professional sports have a small positive effect on earnings per employee in one sector, amusements and recreation, and an offsetting decrease in both earnings and employment in other sectors, supporting the idea that consumer spending on professional sports and spending in other sectors are substitutes. This helps to explain the negative total economic impact of sports found in other studies.

PHYSICAL ACTIVITY AND HEALTH OUTCOMES: EVIDENCE FROM CANADA

Health production models include participation in physical activity as an input. We investigate the relationship between participation in physical activity and health using a bivariate probit model. Participation is identified with an exclusion restriction on a variable reflecting sense of belonging to the community. Estimates based on data from Cycle 3.1 of the Canadian Community Health Survey indicate that participation in physical activity reduces the reported incidence of diabetes, high blood pressure, heart disease, asthma, and arthritis as well as being in fair or poor health. Increasing the intensity above the moderate level and frequency of participation in physical activity appears to have a diminishing marginal impact on adverse health outcomes. Our results provide support for guidelines about engaging in exercise regularly to achieve health benefits.

Input and Output Inventories

This paper builds and estimates a new model of firm behavior that includes decisions to order, use and stock input materials in a stage-of-fabrication environment with either gross production or value added technology. The model extends the traditional linear-quadratic model of output (finished goods) inventories by incorporating delivery and usage of input materials plus input inventory investment--features which largely have been ignored in the literature. Stylized facts indicate that input inventories are empirically more important than output inventories, especially in business cycle fluctuations. Firms simultaneously choose input and output inventories; thus, the model exhibits feedback between stocks induced by dynamic stage-of-fabrication linkages. Estimation of inventory decision rules shows the model is reasonably consistent with data in nondurable and durable goods industries. The results reveal inventory stock interaction, convex costs and viability of gross production and value added specifications, industrial differences and input inventory-saving technology.

The Economic Impact of Postseason Play in Professional Sports

An empirical examination of the determinants of real per capita income in cities with professional sports teams from 1969 to 1997 shows that postseason appearances are not associated with any change in the level of real per capita income in these cities. However, in the city that is home to the winning team from the Super Bowl, real per capita personal income is found to be higher by about

The Economic Consequences of Professional Sports Strikes and Lockouts

140, perhaps reflecting a link between winning the Super Bowl and the productivity of workers in cities. Overall, economic benefits flowing from future postseason appearances cannot justify public expenditures on professional sports franchises or facilities.

An Economic Analysis of Participation and Time Spent in Physical Activity

The National Basketball Association (NBA) lockout of 1998–1999 resulted in the cancellation of a significant number of games. According to the claims made by proponents of sports-driven economic growth, cities with NBA franchises should experience significant negative economic losses from this work stoppage because of the lost spending in and around basketball arenas during this event. Although it will be several years before adequate data exist for a careful ex post evaluation of the effects of the lockout, an examination of the impact of past work stoppages in professional football and basketball can shed some light on the potential impact of the NBA lockout as well as the viability of professional sports as engines of economic growth in cities. The parameter estimates from a reduced-form empirical model of the determination of real per capita income in 37 Standard Metropolitan Statistical Areas (SMSAs) over the period 1969–1996 suggest that prior work stoppages in professional football and baseball had no impact on the economies of cities with franchises. Further, the departure of professional basketball from cities had no impact on their economies in the following years. These results refute the idea that attracting professional sports franchises represents a viable economic development strategy.

Do Business Cycles Affect State Appropriations to Higher Education

Abstract This paper develops and estimates an economic model of physical activity that distinguishes between the participation and duration decisions (extensive and intensive margins). Results from IV estimators indicate that economic factors like income and opportunity cost of time are important determinants of physical activity and affect the participation and time spent decisions differently. Individuals with higher income are more likely to participate but, conditional on participation, spend less time engaged in physical activity. Individual characteristics like gender, race, marital status and having children also play an important role in the participation and duration decisions.

Assessing the Economic Impact of Sports Facilities on Residential Property Values: A Spatial Hedonic Approach

Spending on higher education constitutes an important and increasing portion of state government spending and a major source of operating funds at public institutions of higher education. Anecdotal evidence suggests that state appropriations are subject to cyclical variation. An analysis of state appropriations to higher education, enrollment in two- and four-year public colleges and universities, and state-specific measures of the business cycle for all 50 states over the period 1969–1994 shows that state appropriations to higher education are highly sensitive to changes in the business cycle. A 1% change in real per capita income was, on average, associated with a 1.39% change in real state appropriations per full-time equivalent student enrolled. This implied decline in state government funding, coupled with the increase in enrollment in higher education during recessions reported by Betts and McFarland (1995), suggest that public institutions of higher education may experience fiscal stress during economic downturns. These results also suggest that state legislators and education policymakers should reconsider their higher education funding policies during recessions in order to allow public colleges and universities to provide dislocated workers with access to quality education and training during these periods.