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An analysis of consumer response to corruption

Author

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  • Babatunde Buraimo
  • Giuseppe Migali
  • Robert Simmons

Abstract

The literature on economics of corruption is lacking in evidence on consumer responses to identifiable scandals. The Calciopoli episode affecting Italian football in the 2005/06 season serves as an opportunity for an empirical investigation into consumer (fan) behaviour following punishments imposed by the Italian league on clubs whose officials were found guilty of corrupt practices. Using a difference-in-difference estimation method, where the convicted teams are the treatment group, we find that home attendances for treated teams fell by around 16%, relative to control group teams defined as those clubs not subject to league-imposed punishment. We show further that the fall in attendances identified with Calciopoli punishment resulted in non-trivial gate revenue reductions. Our results suggest that a sizeable number of fans of the punished clubs were subsequently deterred from supporting their teams inside the stadium. We explore alternative explanations of this adverse fan response.

Suggested Citation

  • Babatunde Buraimo & Giuseppe Migali & Robert Simmons, 2014. "An analysis of consumer response to corruption," Working Papers 64473209, Lancaster University Management School, Economics Department.
    • Handle: RePEc:lan:wpaper:64473209
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    1. Tito Boeri & Battista Severgnini, 2014. "The decline of professional football in Italy," Chapters, in: John Goddard & Peter Sloane (ed.), Handbook on the Economics of Professional Football, chapter 19, pages 322-335, Edward Elgar Publishing.
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    1. Tito Boeri & Battista Severgnini, 2014. "The decline of professional football in Italy," Chapters, in: John Goddard & Peter Sloane (ed.), Handbook on the Economics of Professional Football, chapter 19, pages 322-335, Edward Elgar Publishing.
    2. David Forrest, 2014. "Football and betting," Chapters, in: John Goddard & Peter Sloane (ed.), Handbook on the Economics of Professional Football, chapter 23, pages 383-400, Edward Elgar Publishing.
    3. James Reade, 2014. "Detecting corruption in football," Chapters, in: John Goddard & Peter Sloane (ed.), Handbook on the Economics of Professional Football, chapter 25, pages 419-446, Edward Elgar Publishing.
    4. Raul Caruso & Marco Di Domizio & Domenico Rossignoli, 2017. "Aggregate wages of players and performance in Italian Serie A," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 34(3), pages 515-531, December.
    5. John Goddard & Peter Sloane (ed.), 2014. "Handbook on the Economics of Professional Football," Books, Edward Elgar Publishing, number 14821.

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    Keywords

    corruption; consumer demand; Calciopoli; football; attendances;
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