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Effects of Deflation and Macroeconomic Shocks on Leisure Spending in the Pre-War Era: Evidence from Major League Baseball, 1890–1940

Author

Listed:
  • Ran Tao

    (Lake Forest College and University of Wisconsin)

  • Richard C. K. Burdekin

    (Claremont McKenna College)

  • David Berri

    (Southern Utah University)

Abstract

Pre-war baseball attendance data afford a unique opportunity to assess how leisure spending fared not only through deflation but also after such shocks as the Spanish Flu of 1918 and the 1929 Wall Street Crash. Long-run analysis via a vector error correction model (VECM) reveals significant cointegration of baseball attendance with both prices and output. A long-run positive relationship with prices offers evidence of a negative impact of deflation on leisure spending, suggesting that deflation is indeed more to be feared than inflation. There are also apparent parallels between the post-pandemic boom in leisure spending in 1919 and the post-2020 experience.

Suggested Citation

  • Ran Tao & Richard C. K. Burdekin & David Berri, 2022. "Effects of Deflation and Macroeconomic Shocks on Leisure Spending in the Pre-War Era: Evidence from Major League Baseball, 1890–1940," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 50(3), pages 119-132, December.
    • Handle: RePEc:kap:atlecj:v:50:y:2022:i:3:d:10.1007_s11293-022-09756-3
    DOI: 10.1007/s11293-022-09756-3
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    References listed on IDEAS

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