GOOD NEWS, BAD NEWS AND GARCH EFFECTS IN STOCK RETURN DATA

It is shown that the volume of trade can be decomposed into proportional proxies for stochastic flows of good news and bad news into the market. Positive (good) information flows are assumed to increase the price of a financial vehicle while negative (bad) information flows decrease the price. For the majority of a sample of ten split-stocks it is shown that the proposed decomposition explains more GARCH than volume itself. Using the proposed decomposition, the variance of returns for younger split stocks reacts asymmetrically to good news flowing into the market, while the variance for older split-stocks reacts symmetrically to good news and bad news.information flows; autocorrelation

Driver Success in the NASCAR Sprint Cup Series: The Impact of Multi-Car Teams

This paper explores the impact of multi-car teams on driver wins, total points, and total earnings in the NASCAR Sprint Cup Series for the years of 2005 through 2008. Early in NASCAR’s history, multi-car teams were rare as the conventional wisdom was that multi-car teams would have poor chemistry which would negatively impact driver performance. Recently, however, multi-car teams have become more popular. Using season-level data, we show that multi-car teams generally enjoy a competitive advantage on the track over single-car teams but that diminishing returns to the number of cars on a team mitigates the motivation for arbitrarily large teams.peer effects, returns to scale, motor sports

Spillovers from the Gridiron: Evidence from Women’s Collegiate Basketball

This paper empirically investigates whether schools with an intercollegiate football team experience greater attendance at women’s basketball games. The empirical question is important because if football increases attendance and hence revenue to other sports then these benefits should be included when considering the net benefits of football. Using a cross-section of 329 Division IA women’s basketball programs from 2005-2006, we find that having a football program corresponds with an increase in per-game attendance of approximately 500 people. This spill-over benefit of having a football team should be credited against the costs of starting and maintaining a football team.NCAA, college sports, positive externalities

Multiproduct Pricing in Major League Baseball: A Principal Components Analysis

The empirical analysis of multiproduct pricing suffers from a lack of clear theoretical guidance and appropriate data, limitations which often render traditional regression-based analyses impractical. This paper analyzes ticket, parking, and concession pricing in Major League Baseball for the period 1991-2003 using a new methodology based on principal components, which allows inferences to be formed about the factors underlying price variation without strong theoretical guidance or abundant information about costs and demand. While general demand shifts are the most important factor, they explain only half of overall price variation. Also important are price interactions that derive from demand interrelationships between goods and the desire to maximize the capture of consumer surplus in the presence of heterogeneous demand.

Mega-Events: Is the Texas-Baylor game to Waco what the Super Bowl is to Houston?

This paper estimates the total sales and sales tax revenue impacts on host communities of a variety of professional and collegiate sporting events. Using 126 jurisdictions from Texas, covering every month from January, 1990 through April of 2006, the analysis finds that regular season games in the NBA, NFL, NHL, and MLB have widely disparate effects. The NBA and NFL regular season games are net losers of revenue, NHL and MLB games generate additional revenue. Collegiate regular season football games are revenue generators for small cities and towns home to D-I and D-IAA football, but cities that are home to teams from the old Southwest Conference or the new Big 12 conference do not gain revenues from home contests. The Super Bowl generated over $2 million in tax revenues for Houston, by far the largest revenue boost of any of the events in our data.tourism, economic impacts, special events

Peer Effects in Team Sports: Empirical Evidence from NCAA Relay Teams

This paper investigates whether disparity in team member quality impacts team production using NCAA 4x400m relay teams. The net peer effects are estimated to have both an absolute and relative negative effect on the team performance. Because NCAA relay teams are comprised of unpaid amateurs, we utilize a direct measure of team-member quality rather than indirect measures such as wages. The evidence suggests that a greater disparity in team member quality reduces team performance, that is, it increases a relay team’s running time. This suggests that net negative peer effects exist and support the “team cohesiveness hypothesis” for NCAA relay teams.teamwork, shirking, track and field, sports

The Introduction of the Reserve Clause in Major League Baseball: Evidence of its Impact on Select Player Salaries During the 1880s

This paper investigates the introduction of the reserve clause in Major League Baseball during the 1880s. Taking advantage of a unique data set describing the salaries for twenty nine high-quality players throughout the decade of the 1880s, we investigate the impact of the reserve clause as it evolved from a "gentleman's agreement" to a formal contract stipulation. We test three specific hypotheses concerning the reserve clause: its effect on average salaries, on the remuneration to marginal product, and the premium paid to a player for changing teams. The evidence suggests that introducing the reserve clause reduced average salaries and the premium for changing teams; detectable monopsony power was transferred to team owners almost immediately. However, there was no statistically significant impact of the reserve clause on how much players were paid for their marginal product. The empirical results indicate that reserve clause shifted considerable monopsony power to team owners immediately after it was instituted.Sports economics, monopsony, free agency, negotiation

Influences on Sponsorship Deals in NASCAR: Indirect Evidence from Time on Camera

Corporate sponsorship plays an important role in the entertainment business. The question becomes: what influences the value of a sponsorship contract? Empirical analysis of this question is relatively limited because of a lack of complete data on contract values. This is especially true in NASCAR where sponsorship values are generally not released to the public. We analyze a proportional proxy for driver sponsorship value: the value of time on camera. We find that the value of time on camera is influenced by driver performance but also by their experience and, in the case of two drivers, their family name-brand capital. The results confirm that sponsorship value in NASCAR is not only determined by what a driver has done most recently but, to some extent, what their fathers had done before them. Key Words: Sports, Sponsorship, NASCAR, Naming Rights, Return on Investment, Advertising

Corruption in Transition Economies: Cause or Effect?

This paper investigates the empirical relationship between corruption, economic growth, and government spending in fourteen transitioning economies from 1995-2013. We find strong evidence of bilateral Granger causation between economic growth and corruption for the full sample but weaker evidence of such a relationship for four former Yugoslav republics. We also find bilateral Granger causality between government spending and corruption but a weaker unidirectional Granger causality from government spending to corruption in four former Yugoslav republics. Our results recommend caution when assuming that corruption is purely exogenous in empirical models