Craig A. Depken

Wage disparity and team productivity: evidence from major league baseball

Using data describing baseball teams from 1985 to 1998, it is found that Levines (Levine, D.I., 1991. Cohesiveness, productivity and wage dispersion. Journal of Economic Behavior and Organization 15, 237-255) team-cohesiveness hypothesis is supported over Ramaswamy and Rowthorns (Ramaswamy, R., Rowthorn, E., 1991. Efficiency wages and dispersion. Economica 58, 501-514) danger-potential hypothesis. The implication is that teams with greater wage disparity experience a reduction in team performance.

Social construct and the propensity for software piracy

This study offers evidence that cross-country variation in software piracy is a combination of both traditional economic influences and institutional social mores. Software piracy rates are related to various economic variables and two measures of social construct. The study includes an individualism score, which measures horizontal social relationships, and a measure of power distance, measuring vertical social relationships. It is found that economic variables do play a role in the decision to pirate software and that increased power-distance, or the further individuals feel from their superiors, for example law enforcement officials, the greater the propensity to pirate software.

Fan Loyalty and Stadium Funding in Professional Baseball

This article reexamines the demand for baseball and provides estimates of fan loyalty for U.S.-based professional baseball teams using techniques developed in the stochastic frontier literature. Fans choose to attend games based on price-quality combinations and some intangible fan loyalty. The main focus of this article is to estimate the relative fan loyalty for U.S. professional baseball teams. Fan loyalty is then compared with the outcomes of referenda seeking public funding for new stadiums. Relative fan loyalty is significant in predicting the outcome of public-funding votes.

Fan loyalty in professional sports: an extension to the National Football League.

Using the stochastic frontier framework, estimates of relative fan loyalty in professional football for 1990 to 1997 are estimated. The traditional inefficiency score is reinterpreted as a measure of relative fan loyalty, and the results conform to anecdotal evidence as to which teams have the best fans in the National Football League. The decision of whether to relocate a professional football franchise is related to fan loyalty and other explanatory variables. It is found that a relatively low level of fan loyalty is a motivating factor in the decision to relocate a franchise to a new host city.

When Going in Circles is Going Backward: Outcome Uncertainty in NASCAR

Using data from the 2007, 2008, and 2009 National Association for Stock Car Auto Racing (NASCAR) seasons, this article shows that the uncertainty of outcome hypothesis pertains to both race attendance and television audience, with the former only responding to season-level uncertainty and the latter responding to both race-level and season-level uncertainties. Counter to conventional wisdom, the price of gasoline and unemployment were unrelated to the reported level of attendance. Furthermore, NASCAR broadcasts lose audience when competing against other high-interest sporting events and declines in both television ratings and audience size during the NASCAR season were not unique to 2009. Overall, the empirical evidence suggests that declining competitive balance might have been the common factor that reduced both television audiences and race attendance during this period.

NCAA Enforcement and Competitive Balance in College Football

This article investigates the effects of National Collegiate Athletic Association (NCAA) enforcement on the competitive balance of major college football conferences in the context of the standard empirical crime model. Using an unbalanced panel describing 11 major Division IA football conferences from 1953 through 2003, NCAA enforcement efforts, in the form of investigations and probations, and the severity of punishment, measured as the average length of probations imposed, are found to have opposite but not necessarily offsetting effects on competitive balance. Greater levels of enforcement in a conference improve competitive balance. On the other hand, greater severity of punishment reduces competitive balance. The empirical evidence indicates that these changes take approximately five years to be fully dissipated. Overall, the empirical results indicate that, on average, the net effect of NCAA enforcement is an improvement in competitive balance.

Is Advertising a Good or a Bad? Evidence from U.S. Magazine Subscriptions*

This article investigates whether advertising has a beneficial or deleterious impact on the demand for magazine subscriptions. Specifically, we test whether the demand for magazines indicates if consumers consider advertising a “bad” or a “good.” Using data describing 95 U.S. magazines for the years 1996–98 we find that advertising substituted for editorial content reduces both the quantity and price of magazine subscriptions. However, the full impact of additonal advertising on subscription price and quantity is tied to the percentage of a magazine dedicated to advertising. We show how this ambiguity is reflected in the magazines included in our sample.

Mega-Events: Is Baylor Football to Waco What the Super Bowl is to Houston?

Using monthly data describing 23 cities in Texas from January, 1990, through December, 2008, the net impacts of various professional and collegiate sporting events on sales tax revenues are estimated. Contrary to the rhetoric offered by those who argue in favor of public subsidies to host professional sports franchises and mega-events, the authors find that regular season and many postseason games actually correspond with net decreases in economic activity in the host city, from which we infer that a professional sports franchise generates considerable substitution effects for the local population. The authors find that college football games have a positive impact on local host-city tax revenues and that the relative impact of a season of college football might be roughly equivalent to the relative impact of the Super Bowl.

Free Agency and the Concentration of Player Talent in Major League Baseball

This article investigates whether the removal of the reserve clause in professional baseball affected the concentration of player talent in the industry. After free agency, a few wealthy teams could purchase the best players over time, leading to a high concentration of productive players and adversely affecting the competitive nature of the industry. To investigate his possibility, the Herfindahl-Hirschman Index, and the deviation of the index from its ideal, for home runs, strike outs and runs scored is related to structural changes in professional baseball. Free agency reduced the concentration of home runs but not of strike outs or runs scored. These findings are consistent with increased player mobility but not with monopolization by a minority of teams.

School characteristics and the demand for college

We estimate the demand for colleges in the United States by relating new applications to easily comparable characteristics of the schools in the sample. We find that the demand for 1134 U.S. colleges in 1994 is positively related to out-of-state tuition but inversely related to in- state tuition. Further, we find those who apply to private schools are more price and income sensitive, and respond more to stronger faculty staffs. That a given state has more schools has a positive effect on the number of public-school applications but a negative impact on private- school applications. Finally, we find no correlation between state population and the number of applicants to colleges in that state, suggesting that those who are willing and able to attend college are mobile.