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The Monetary Value of Competitive Balance for Sport Consumers: A Stated Preference Approach to European Professional Football

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  • Tim Pawlowski

    (University of Tuebingen)

  • Oliver Budzinski

    (Ilmenau University of Technology)

Abstract

Ever since the pioneering work of Rottenberg (1956) and Neale (1964), the uncertainty of outcome hypothesis (UOH) has played a major role in the economic analysis of professional sport leagues. However, decades of empirical research have not been successful in establishing clear evidence for the importance of competitive balance (CB) for attendance or TV viewers in European professional football. In order to find possible reasons for the gap between the UOH and (the lack of) its empirical validation, our paper adopts a stated preference approach focused on the fans’ perception of CB and its relevance in three European professional football leagues. The results indicate that a tipping point/threshold value of CB exists and that crossing this threshold can lead to massive demand reactions. However, since the threshold has not been reached in the leagues included in the sample, the paper provides a possible explanation for the above mentioned gap.

Suggested Citation

  • Tim Pawlowski & Oliver Budzinski, 2013. "The Monetary Value of Competitive Balance for Sport Consumers: A Stated Preference Approach to European Professional Football," International Journal of Sport Finance, Fitness Information Technology, vol. 8(2), pages 112-123, May.
    • Handle: RePEc:jsf:intjsf:v:8:y:2013:i:2:p:112-123
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    1. Walter C. Neale, 1964. "The Peculiar Economics of Professional Sports," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 78(1), pages 1-14.
    2. Simon Rottenberg, 1956. "The Baseball Players' Labor Market," Journal of Political Economy, University of Chicago Press, vol. 64(3), pages 242-242.
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    5. David Forrest & Rob Simmons, 2006. "New Issues in Attendance Demand," Journal of Sports Economics, , vol. 7(3), pages 247-266, August.
    6. Tim Pawlowski, 2013. "Testing the Uncertainty of Outcome Hypothesis in European Professional Football," Journal of Sports Economics, , vol. 14(4), pages 341-367, August.
    7. Peel, David A & Thomas, Dennis A, 1992. "The Demand for Football: Some Evidence on Outcome Uncertainty," Empirical Economics, Springer, vol. 17(2), pages 323-331.
    8. Georg Stadtmann & Dirk Czarnitzki, 2002. "Uncertainty of outcome versus reputation: Empirical evidence for the First German Football Division," Empirical Economics, Springer, vol. 27(1), pages 101-112.
    9. Brad R. Humphreys, 2002. "Alternative Measures of Competitive Balance in Sports Leagues," Journal of Sports Economics, , vol. 3(2), pages 133-148, May.
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    Cited by:

    1. Lahvicka, Jiri, 2013. "Impact of playoffs on seasonal uncertainty in Czech ice hockey Extraliga," MPRA Paper 44608, University Library of Munich, Germany.
    2. Lahvicka, Jiri, 2013. "Does Match Uncertainty Increase Attendance? A Non-Regression Approach," MPRA Paper 48571, University Library of Munich, Germany.
    3. Franziska Prockl & Dirk Semmelroth, 2018. "Perception Versus Reality - Competitive Balance In Major League Soccer From 1996 – 2016," Working Papers Dissertations 36, Paderborn University, Faculty of Business Administration and Economics.

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    More about this item

    Keywords

    willingness-to-pay; competitive balance; uncertainty of outcome hypothesis; European football;
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    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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