Thomas A. Rhoads

Determinants of Minor League Baseball Attendance

Like Major League Baseball (MLB), minor league baseball attendance may be influenced by the quality of the team. We use a data set encompassing all A, AA, and AAA minor league teams from 1992 to 2006 and find a positive relationship between a minor league team’s winning percentage and attendance. We also find evidence that minor and MLB are substitutes as increased ticket prices for the nearest MLB team lead to higher minor league attendance if that team is within 100 miles. Similarly, we find that during the MLB strike, minor league attendance increased. Finally, we find that a local or regional MLB team’s winning percentage only has a positive impact on minor league attendance when they are affiliated clubs.

Stadium Construction and Minor League Baseball Attendance

The established literature shows that new stadium construction for major league baseball (MLB) teams can increase attendance, but there are limited studies at the minor league level. We use a data set encompassing all A, AA, and AAA minor league baseball teams from 1992 to 2006 to estimate the impact of stadium construction on minor league attendance. This data set includes almost 200 teams, over half of which constructed a new stadium during the 15-year observation period. Over a ten year period our results show that new stadiums increase attendance by 1.2 million fans at the AAA level, 0.4 million at the AA and high A level, and 0.2 million at short season low A. Additionally, we find evidence that minor and major league baseball are potentially substitutes as increased ticket prices for the nearest MLB team lead to higher minor league attendance. However, a new stadium for local MLB teams does not seem to negatively impact minor league attendance.

Top Prospects and Minor League Baseball Attendance

Minor League Baseball attracts over 40 million fans a year. One potentially important attendance draw is the ability for a fan to see a future major league baseball star. Each year Baseball America, a leading industry publication, ranks 100 top prospects that have yet to play substantially in the major leagues. Many of these top prospects continue to develop for a year or more in the minor leagues, which gives fans an opportunity to see potential future Major League Baseball (MLB) stars at their local minor league club. The authors use a data set encompassing all AA and AAA minor league baseball teams from 1992 to 2009 to estimate the impact of having a top 100 Baseball America prospect on a minor league team’s attendance. Their results suggest that only those prospects ranked in the top 5 and at the highest level (AAA) have an impact on their team’s attendance and their impact on attendance is small.

Regulation through Collaboration: Final Authority and Information Symmetry in Environmental Coasean Bargaining

Many people see collaborative decision-making as the next wave in environmental regulation. This paper examines how two elements within collaborative processes—final authority over stakeholder negotiations and information symmetry through mandated information sharing of relative payoffs—affect the efficiency and the distribution of wealth. Using a Coasean bargaining experiment, we find final authority for stakeholders is critical for efficient negotiations. Efficiency drops by two-thirds given a 10% risk to the final authority given symmetric information. Efficiency declines further once asymmetric information is considered. Final authority appears to be a necessary but not sufficient condition for efficient agreements.

Labor Supply on the PGA TOUR

The unique nature of the PGA TOUR allows exempt players to have a large measure of discretion in the number of tournaments they enter in a given year. Recent policy changes on the PGA TOUR suggest that TOUR players may be responsive to exemption status and expected earnings. Using the previous year’s real earnings per event as a proxy for expected earnings and controlling for player effects and exemption status, ordinary least squares results indicate that players’ annual entry decisions change with an exemption status change but not with higher expected earnings. An exempt, non-elite PGA TOUR player whose exemption is set to expire in at least 2 years enters slightly fewer tournaments, whereas an increase in expected earnings has no effect on tournaments entered. This suggests that the PGA TOUR would do well not to ignore possible effects of future policy changes on player annual entry decisions.

On Coasean bargaining with transaction costs

The letter explores how transaction costs affect the efficiency and rationality of Coasian bargaining. Efficiency remained relatively robust with low transaction costs, but was significantly reduced with high transaction costs. A cheap talk protocol increased efficiency. Rationality was dominated by constrained self-interest.

Does the Availability of Parental Health Insurance Affect the College Enrollment Decision of Young Americans

The present study examines whether the college enrollment decision of young individuals (student full-time, student part-time, and non-student) depends on health insurance coverage via a parents family health plan. Our findings indicate that the availability of parental health insurance can have significant effects on the probability that a young individual enrolls as a full-time student. A young individual who has access to health insurance via a parent can be up to 22% more likely to enroll as a full-time student than an individual without parental health insurance. After controlling for unobserved heterogeneity this probability drops to 5.5% but is still highly significant. We also find that the marginal effect of the availability of parental health insurance has a larger effect on older students between ages 21 and 23. We provide a brief discussion about possible implications of the Affordable Care Act of 2010 in this context.

Reputation and the league standing effect: the case of a split season in minor league baseball

ABSTRACT Split season league design resets standings at the midpoint of the season, thus allowing for two periods in which a team can potentially achieve success in a single season. This context allows us to test both the reputation of the first half winner and the league standing effect on demand. Examination of game-level data from the 2010 Southern League reveals fans are unaffected by measures of both team quality and league standing in the second half of the season. On the other hand, the first half winners saw an 11% increase in attendance as a percent of stadium capacity, suggesting that in the second half of the season winners matter more than winning.

Proximity’s Impact on Minor League Baseball Attendance

With a focus on minor league attendance, proximity becomes an important factor impacting the business of minor league baseball. There is an optimal distance away from other baseball stadiums that can lead to maximum stadium revenues for a minor league baseball team. Here I examine the effect of proximity on average attendance at minor league baseball games with the understanding that greater average attendance is likely to be strongly correlated with a larger revenue stream. At the minor league level, greater attendance is preferred because of the very limited revenue stream from broadcasting these games on television, radio, and the Internet.

What Does This All Mean and Where Do We Go From Here

While Major League Baseball teams seem to be moving generally towards affiliating with minor league teams that are closer in proximity, there is still considerable room for improvement. Any remaining gains to be made in regionalization will likely require the Commissioner’s Office in Major League Baseball to coordinate the necessary moves. A deeper understanding of how proximity impacts player development, regional brand awareness, and minor league game day attendance is needed. A unified goal of maximizing attendance at all levels of affiliated professional baseball requires central planning. This chapter provides some suggestions to direct future research in this field of study.