Impact of Overwhelming Joy on Consumer Demand : The Case of a Soccer World-Cup Victory

Abstract

Consumer sentiment is a key determinant of the demand for any good or service. However, the identification of periods of pessimistic or optimistic mood remains challenging in practice. In this paper, we consider a natural experiment based on the Soccer World Cup. We identify the period following a Soccer World-Cup victory as a period of overwhelming joy for the winning country. Then, we test the impact of a World-Cup victory on the demand for Soccer in this country. Our empirical study is based on all matches of the French Soccer First League during the four seasons surrounding the 1998 World Cup. After controlling for the main determinants of attendance, we find that consumer demand has positively, significantly, and durably shifted following the 1998 World Cup. The World-Cup effect persists after we control for season-ticket holders. Finally, we find that the rise in demand is primarily due to infrastructure and victory effects, and not to hosting effects