The Relationship Between Big-Time College Football and State Appropriations to Higher Education

I investigate the relationship between big-time college football programs and state appropriations to public institutions of higher education. Estimation of a linear reduced form model of the determination of state appropriations to higher education, using a panel of financial, athletic, and state-specific economic data from 570 public institutions of higher education at the Baccalaureate level or higher from 1976-1996 shows that schools with Division I-A football programs receive about 6% more in state appropriations than schools that do not field a Division I-A football team. Institutions with successful football teams receive 3% to 8% increases in state appropriations the following year. Defeating an in-state rival in a prominent football game is also associated with an increased level of appropriation in the following year. These results support the predictions of the model of competition for political influence among pressure groups developed by Becker (1983) and suggest that the total economic benefit associated with big-time athletic programs may be larger than previously thought.

Caught Stealing: Debunking the Economic Case for D.C. Baseball

District of Columbia mayor Anthony Williams has convinced Major League Baseball to move the Montreal Expos to D.C. in exchange for the city's building a new ballpark. Williams has claimed that the new stadium will create thousands of jobs and spur economic development in a depressed area of the city. Williams also claims that this can be accomplished without tax dollars from D.C. residents. Yet the proposed plan to pay for the stadium relies on some kind of tax increase that will likely be felt by D.C. residents. Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city's economy. The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over the entire metropolitan area. A baseball team in D.C. might produce intangible benefits. Rooting for the team might provide satisfaction to many local baseball fans. That is hardly a reason for the city government to subsidize the team. D.C. policymakers should not be mesmerized by faulty impact studies that claim that a baseball team and a new stadium can be an engine of economic growth

The Economic Choice of Participation and Time Spent in Physical Activity and Sport in Canada

The health benefits of participation in physical activity are well documented, yet the prevalence of meeting physical activity guidelines remains low. We examine the determinants of participation in physical activity in Canada by estimating double hurdle models of participation and time spent using data from the 2001 Canadian Community Health Survey (CHHS). We find higher income is associated with a higher probability of participating and less time spent in widely practiced sports like running and swimming, but the size of the income e ffect is relatively small. The hourly wage is generally positive and significant in both the participation and time spent equations suggesting a dominating income eff ect. Distinguishing between the extensive and intensive margins of the participation decision is important for untangling the eff ects of income, age, gender and family structure on these choices.sport participation; physical activity; time allocation; opportunity cost of time

The Economics of Participation and Time Spent in Physical Activity

This paper examines the economics of participation in physical activity by developing a consumer choice model of participation and estimating it using data drawn from the Behavioral Risk Factor Surveillance Survey (BRFSS). Both emphasize that individuals face two distinct decisions: (1) should I participate; and (2) how much time should I spend participating? The results indicate that economic factors like income and opportunity cost of time are important determinants of physical activity and that physical activity is a normal good. Individual characteristics also play an important role in determining the amount of time spent in physical activity. Participation and time spent decline with age. Females, married people, households with children, blacks and hispanics all spend less time engaged in physical activity than males, single people, childless households and whites. Public policy interventions aimed at improving physical activity of Americans targeted to specific sub-populations are likely to be more effective than broad-based policies.time allocation; physical activity; sport participation

Voting on Stadium and Arena Subsidies

We analyze voting on subsidies for professional sports facilities in Harris County (Houston), Texas and Brown County (Green Bay), Wisconsin to learn more about voter preferences for these subsidies. The results differ somewhat between the two jurisdictions, as do the nature of the supports being proposed and the communities. One consistent result is that voting precincts that have a relatively high degree of poverty tend to oppose subsidies for professional sports. Another consistent result is that voters in close proximity to existing facilities are more likely to favor subsidies than are voters living farther from the facilities. In Harris County, the results consistently indicate that those over 65 years of age, whites, and those with Bachelors degrees statistically significantly oppose subsidies while those with higher incomes and blacks favor the subsidies. Different values of consumption benefits, stemming from differences in preferences, may explain these voting patterns.Local Economic Development, Professional Sports, Referendums

Tit-for-tat Strategies in Repeated Prisoner's Dilemma Games: Evidence from NCAA Football

Defection in every period is the dominant strategy Nash equilibrium in finitely repeated prisoner's dilemma games with complete information. However, in the presence of incomplete information, players may have an incentive to cooperate in some periods, leading to tit-for-tat strategies. We describe the decision to comply with recruiting regulations or cheat made by NCAA Division IA football programs as a finitely repeated prisoner's dilemma game. The game includes incomplete information about the resources devoted to football programs, the recruiting effort made by rival programs, and the behavior of rival programs. We test for evidence that NCAA Division IA football programs follow tit-for-tat strategies in terms of complying with or defecting from NCAA recruiting rules using panel data from NCAA Division IA football over the period 1976-2005. We find anecdotal and empirical evidence that is consistent with tit-for-tat strategies in this setting. The presence of in-conference rivals under NCAA sanctions increases the probability of a team being placed under sanctions.noncooperative behavior; cartels; NCAA football; tit-for-tat strategies

Prize Structure and Performance: Evidence from NASCAR

The predictions that emerge from tournament theory have been tested in a number of sports-related settings. Since sporting events involving individuals (golf, tennis, running, auto racing) feature rank order tournaments with relatively large payoffs and easily observable outcomes, sports is a natural setting for such tests. In this paper, we test the predictions of tournament theory using a unique race-level data set from NASCAR. Most of the previous tests of tournament theory using NASCAR data have used either season level data or race level data from a few seasons. Our empirical work uses race level NASCAR data for 1,114 races over the period 1975-2009. Our results support the predictions of tournament theory: the larger the spread in prizes paid in the race, measured by the standard deviation of prizes paid or the interquartile range of prizes paid, the higher the average speed in the race. Our results account for the length of the track, the number of entrants, the number of caution flags, and unobservable year and week heterogeneity.NASCAR; tournament theory

Lottery Participants and Revenues: An International Survey of Economic Research on Lotteries

Government sponsored lotteries operate around the world. Their popularity has grown substantially over time. Legal lottery gambling generates significant public revenue, much of it from the lower part of the income distribution. Lottery is almost always an unfair bet, so explaining the purchase of lottery tickets by risk-averse consumers has long challenged economic theory. Lotteries can be analyzed from the perspective of public finance, as source of public revenue, or consumer theory, as a consumer commodity. We survey the state of economic research on lotteries from both perspectives, focusing on the key empirical findings.lottery; implicit tax; effective price; jackpot; conscious selection

A Test of Monopoly Price Dispersion Under Demand Uncertainty

Dana (2001) developed a model of price dispersion under demand uncertainty. The model predicts that, in the face of uncertain demand and inflexible prices, monopolists maximizes pro fits using ex ante price discrimination. We test the predictions of this model using a unique data set from Major League Baseball (MLB). Estimation of a two-way fixed effects model indicate that ticket price dispersion changes systematically with demand uncertainty in MLB, verifying the predictions of the model.price dispersion; demand uncertainty; sports

Do Gamblers Think That Teams Tank? Evidence from the NBA

A growing body of literature indicates that sports teams face incentives to lose games at the end of the season. This incentive arises from league entry draft policy. We use data from betting markets to confirm the existence of tanking, or the perception of tanking, in the NBA. Results from a SUR model of point spreads and point differences in NBA games indicate that betting markets believe that tanking takes place in the NBA, even though the evidence that tanking actually exists is mixed. NBA policy changes also affect betting market outcomes.incentives; betting markets; tanking