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Population and Bandwagon Effects on Local Team Revenues in Major League Baseball

Author

Listed:
  • Daniel Brown

    (University of Delaware)

  • Charles R. Link

    (University of Delaware, linkc@lerner.udel.edu)

Abstract

Panel models are used to estimate the determinants of local revenues in Major League Baseball. This article updates a previous study by Burger and Walters (2003) with additional data and panel techniques. Consistent with their results, this study finds that market size does matter as a determinant of team marginal revenues when using panel techniques. However, two important differences surface when estimating the bandwagon effect. First, performing well in the postseason is much more important to marginal revenues than having a good regular-season win—loss record. Second, there are spillover effects associated with postseason wins, implying that misspecification arises in models where performance and revenue are only contemporaneously related.

Suggested Citation

  • Daniel Brown & Charles R. Link, 2008. "Population and Bandwagon Effects on Local Team Revenues in Major League Baseball," Journal of Sports Economics, , vol. 9(5), pages 470-487, October.
    • Handle: RePEc:sae:jospec:v:9:y:2008:i:5:p:470-487
    DOI: 10.1177/1527002508315693
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    References listed on IDEAS

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    1. Scully, Gerald W, 1974. "Pay and Performance in Major League Baseball," American Economic Review, American Economic Association, vol. 64(6), pages 915-930, December.
    2. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    3. John D. Burger & Stephen J. K. Walters, 2003. "Market Size, Pay, and Performance," Journal of Sports Economics, , vol. 4(2), pages 108-125, May.
    4. Paul M. Sommers & Noel Quinton, 1982. "Pay and Performance in Major League Baseball: The Case of the First Family of Free Agents," Journal of Human Resources, University of Wisconsin Press, vol. 17(3), pages 426-436.
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    Cited by:

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    4. Brian M. Mills & Rodney Fort, 2023. "Performance Quality Preference Heterogeneity in Major League Baseball," Journal of Sports Economics, , vol. 24(3), pages 352-373, April.

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