IDEAS home Printed from https://ideas.repec.org/a/sae/jospec/v20y2019i1p3-24.html
   My bibliography  Save this article

Of Bricks and Bats: New Stadiums, Talent Supply, and Team Performance in Major League Baseball

Author

Listed:
  • Duane W. Rockerbie
  • Stephen T. Easton

Abstract

This article considers whether publicly financed new facility investments encourage professional sports team owners to increase their investments in costly talent. We develop a model of a sports league that incorporates publicly financed facility investments, the unique characteristics of the talent market, and revenue sharing to explore the complementarity between new facility amenities, the team budget decision, and team performance. Our empirical results suggest that publicly financed new stadiums do little to improve team performance, not due to restrictions in the talent market, but rather due to a lack of fan response.

Suggested Citation

  • Duane W. Rockerbie & Stephen T. Easton, 2019. "Of Bricks and Bats: New Stadiums, Talent Supply, and Team Performance in Major League Baseball," Journal of Sports Economics, , vol. 20(1), pages 3-24, January.
    • Handle: RePEc:sae:jospec:v:20:y:2019:i:1:p:3-24
    DOI: 10.1177/1527002517723049
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/1527002517723049
    Download Restriction: no
    File URL: https://libkey.io/10.1177/1527002517723049?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kevin G. Quinn & Paul B. Bursik & Christopher P. Borick & Lisa Raethz, 2003. "Do New Digs Mean more Wins?," Journal of Sports Economics, , vol. 4(3), pages 167-182, August.
    2. Dennis Coates & Brad R. Humphreys, 2005. "Novelty Effects Of New Facilities On Attendance At Professional Sporting Events," Contemporary Economic Policy, Western Economic Association International, vol. 23(3), pages 436-455, July.
    3. Stefan Kesenne, 2015. "Revenue Sharing and Absolute League Quality; Talent Investment and Talent Allocation," Scottish Journal of Political Economy, Scottish Economic Society, vol. 62(1), pages 51-58, February.
    4. Lindh, Thomas, 1992. "The inconsistency of consistent conjectures : Coming back to Cournot," Journal of Economic Behavior & Organization, Elsevier, vol. 18(1), pages 69-90, June.
    5. Dennis Coates & Brad R. Humphreys, 2008. "Do Economists Reach a Conclusion on Subsidies for Sports Franchises, Stadiums, and Mega-Events?," Econ Journal Watch, Econ Journal Watch, vol. 5(3), pages 294-315, September.
    6. Bodvarsson, Örn B. & Humphreys, Brad R., 2009. "Labor Market Discrimination and Capital Investment: The Effects of Fan Discrimination on Stadium Investment," IZA Discussion Papers 4551, Institute of Labor Economics (IZA).
    7. Kaitlyn Harger & Brad R. Humphreys & Amanda Ross, 2016. "Do New Sports Facilities Attract New Businesses?," Journal of Sports Economics, , vol. 17(5), pages 483-500, June.
    8. Jason Winfree & Rodney Fort, 2012. "Nash Conjectures and Talent Supply in Sports League Modeling," Journal of Sports Economics, , vol. 13(3), pages 306-313, June.
    9. Örn B. Bodvarsson & Brad R. Humphreys, 2013. "Labor Market Discrimination And Capital: The Effects Of Fan Discrimination On Stadium And Arena Construction," Contemporary Economic Policy, Western Economic Association International, vol. 31(3), pages 604-617, July.
    10. Rodney Fort & James Quirk, 2007. "Rational Expectations And Pro Sports Leagues," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(3), pages 374-387, July.
    11. Stephen T. Easton & Duane W. Rockerbie, 2005. "Revenue Sharing, Conjectures, and Scarce Talent in a Sports League Model," Journal of Sports Economics, , vol. 6(4), pages 359-378, November.
    12. Stefan Szymanski, 2013. "Some Observations on Fort and Winfree “Nash Conjectures and Talent Supply in Sports League Modeling," Journal of Sports Economics, , vol. 14(3), pages 321-326, June.
    13. John Vrooman, 2015. "Sportsman Leagues," Scottish Journal of Political Economy, Scottish Economic Society, vol. 62(1), pages 90-115, February.
    14. Anping Chen & Marlon Boarnet & Mark Partridge & Haifang Huang & Brad R. Humphreys, 2014. "New Sports Facilities And Residential Housing Markets," Journal of Regional Science, Wiley Blackwell, vol. 54(4), pages 629-663, September.
    15. Christopher M. Clapp & Jahn K. Hakes, 2005. "How Long a Honeymoon? The Effect of New Stadiums on Attendance in Major League Baseball," Journal of Sports Economics, , vol. 6(3), pages 237-263, August.
    16. Dennis Coates, 2007. "Stadiums And Arenas: Economic Development Or Economic Redistribution?," Contemporary Economic Policy, Western Economic Association International, vol. 25(4), pages 565-577, October.
    17. Paul Madden, 2011. "Game Theoretic Analysis of Basic Team Sports Leagues," Journal of Sports Economics, , vol. 12(4), pages 407-431, August.
    18. John Vrooman, 2009. "Theory of the Perfect Game: Competitive Balance in Monopoly Sports Leagues," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 34(1), pages 5-44, February.
    19. Jeffrey G. Owen, 2003. "The Stadium Game," Journal of Sports Economics, , vol. 4(3), pages 183-202, August.
    20. Humphreys, Brad R. & Zhou, Li, 2015. "Sports facilities, agglomeration, and public subsidies," Regional Science and Urban Economics, Elsevier, vol. 54(C), pages 60-73.
    21. Anthony C. Krautmann & David J. Berri, 2007. "Can We Find It at the Concessions? Understanding Price Elasticity in Professional Sports," Journal of Sports Economics, , vol. 8(2), pages 183-191, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rockerbie, Duane & Easton, Stephen, 2021. "Multiple Equilibria and Unsustainable Runs in Major League Baseball: More Evidence," MPRA Paper 109971, University Library of Munich, Germany.
    2. Anna Bykova & Dennis Coates, 2022. "Professional team sporting success: do economic and personal freedom provide competitive advantages?," Economics of Governance, Springer, vol. 23(3), pages 323-358, December.
    3. Rockerbie, Duane & Easton, Stephen, 2019. "A Real Options Approach to Multi-Year Contracts in Professional Sports," MPRA Paper 93062, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John Charles Bradbury, 2022. "The impact of sports stadiums on localized commercial activity: Evidence from a Business Improvement District," Journal of Regional Science, Wiley Blackwell, vol. 62(1), pages 194-217, January.
    2. Geoffrey Propheter, 2019. "Estimating the Effect of Sports Facilities on Local Area Commercial Rents: Evidence From Brooklyn’s Barclays Center," Journal of Sports Economics, , vol. 20(1), pages 91-114, January.
    3. Kaitlyn Harger & Brad R. Humphreys & Amanda Ross, 2016. "Do New Sports Facilities Attract New Businesses?," Journal of Sports Economics, , vol. 17(5), pages 483-500, June.
    4. Paul Madden, 2017. "Comment on Driskill and Vrooman," Journal of Sports Economics, , vol. 18(3), pages 271-281, April.
    5. Paul Madden, 2015. "“Walrasian Fixed Supply Conjecture†Versus “Contest-Nash†Solutions to Sports League Models," Journal of Sports Economics, , vol. 16(5), pages 540-551, June.
    6. Imran Arif & Adam Hoffer & Brad Humphreys & Matthew Style, 2022. "New sports facilities do not drive migration between US cities," Economics of Governance, Springer, vol. 23(3), pages 195-217, December.
    7. Humphreys, Brad R. & Zhou, Li, 2015. "Reference-dependent preferences, team relocations, and major league expansion," Journal of Economic Behavior & Organization, Elsevier, vol. 109(C), pages 10-25.
    8. Rockerbie, Duane & Easton, Stephen, 2017. "Revenue Sharing in Professional Sports Leagues as a Hedge for Exchange Rate Risk," MPRA Paper 77428, University Library of Munich, Germany.
    9. Sepulveda, Cristian F., 2023. "Cost–Benefit Analysis of an “Average” Professional Sports Team or Stadium in the United States," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 14(3), pages 451-477, October.
    10. Helmut Dietl & Rodney Fort & Markus Lang, 2011. "International Sports League Comparisons," Working Papers 0144, University of Zurich, Institute for Strategy and Business Economics (ISU).
    11. Stefan Szymanski, 2023. "Anticipating the honeymoon: Event study estimation of new stadium effects in Major League Baseball using the imputation method," Economic Inquiry, Western Economic Association International, vol. 61(4), pages 1077-1102, October.
    12. Abbiasov, Timur & Sedov, Dmitry, 2023. "Do local businesses benefit from sports facilities? The case of major league sports stadiums and arenas," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    13. Geoffrey Propheter, 2020. "Does Proximity to a New Sports Facility Affect Existing Businesses’ Survival Time?," Journal of Sports Economics, , vol. 21(5), pages 451-476, June.
    14. Rockerbie, Duane & Easton, Stephen, 2019. "A Real Options Approach to Multi-Year Contracts in Professional Sports," MPRA Paper 93062, University Library of Munich, Germany.
    15. Brad R. Humphreys & Hyunwoong Pyun, 2018. "Professional sporting events and traffic: Evidence from U.S. cities," Journal of Regional Science, Wiley Blackwell, vol. 58(5), pages 869-886, November.
    16. Rockerbie, Duane & Easton, Stephen, 2017. "Risk Diversification from Revenue Sharing in a Professional Sports League: Measuring Welfare Gains," MPRA Paper 77431, University Library of Munich, Germany.
    17. Jason Winfree & Rodney Fort, 2012. "Nash Conjectures and Talent Supply in Sports League Modeling," Journal of Sports Economics, , vol. 13(3), pages 306-313, June.
    18. Robert Driskill & John Vrooman, 2016. "It’s Not Over ‘til the Fat Lady Sings," Journal of Sports Economics, , vol. 17(4), pages 354-376, May.
    19. Seth R. Gitter & Thomas A. Rhoads, 2014. "Stadium Construction And Minor League Baseball Attendance," Contemporary Economic Policy, Western Economic Association International, vol. 32(1), pages 144-154, January.
    20. Zachary T. Keeler & Heather M. Stephens & Brad R. Humphreys, 2021. "The Amenity Value of Sports Facilities: Evidence From the Staples Center in Los Angeles," Journal of Sports Economics, , vol. 22(7), pages 799-822, October.

    More about this item

    Keywords

    new stadiums; talent supply; baseball; winning percentage;
    All these keywords.

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:jospec:v:20:y:2019:i:1:p:3-24. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.