IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/25803.html
   My bibliography  Save this paper

Variable Ticket Pricing in Major League Baseball

Author

Listed:
  • Daniel, Rascher
  • Chad, McEvoy
  • Mark, Nagel
  • Matt, Brown

Abstract

Sport teams have historically been reluctant to change ticket prices during the season. Recently, however, numerous sport organizations have implemented variable ticket pricing in an effort to maximize revenues. In Major League Baseball, variable pricing results in ticket price increases or decreases depending on factors such as quality of the opponent, day of the week, month of the year, and for special events such as opening day, Memorial Day and Independence Day (July 4). Using censored regression and elasticity analysis, this paper demonstrates that variable pricing would have yielded approximately $590,000 per year in additional ticket revenue for each Major League team in 1996, ceteris paribus. Accounting for capacity constraints, this amounts to only about a 2.8% increase above what occurs when prices are not varied. For the 1996 season, the largest revenue gain would have been the Cleveland Indians, who would have generated an extra $1.4 million in revenue. The largest percentage revenue gain would have been the San Francisco Giants. The Giants would have seen an estimated 6.7% increase in revenue had they used optimal variable pricing.

Suggested Citation

  • Daniel, Rascher & Chad, McEvoy & Mark, Nagel & Matt, Brown, 2007. "Variable Ticket Pricing in Major League Baseball," MPRA Paper 25803, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:25803
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/25803/1/MPRA_paper_25803.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Levy, Daniel & Bergen, Mark & Dutta, Shantanu & Venable, Robert, 1997. "The Magnitude of Menu Costs: Direct Evidence from Large U.S. Supermarket Chains," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 112(3), pages 791-824.
    2. Donald L. Alexander, 2001. "Major League Baseball," Journal of Sports Economics, , vol. 2(4), pages 341-355, November.
    3. David Boyd & Laura Boyd, 1998. "The home field advantage: Implications for the pricing of tickets to professional team sporting events," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 22(2), pages 169-179, June.
    4. McDonald, Mark & Rascher, Daniel, 2000. "Does Bat Day Make Cents? The Effect of Promotions on the Demand for Major League Baseball," MPRA Paper 25739, University Library of Munich, Germany.
    5. Rodney Fort, 2004. "Inelastic sports pricing," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 25(2), pages 87-94.
    6. Daniel R. Marburger, 1997. "Optimal ticket pricing for performance goods," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 18(5), pages 375-381.
    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. Pettersson, Billie & Hoffmann, Mikael & Andersson, David & Wändell, Per & Levin, Lars-Åke, 2012. "Utilization and costs of glucose lowering therapies following health technology assessment for the new reimbursement scheme in Sweden," Health Policy, Elsevier, vol. 108(2), pages 207-215.
    2. Elise M. Beckman & Wenqiang Cai & Rebecca M. Esrock & Robert J. Lemke, 2012. "Explaining Game-to-Game Ticket Sales for Major League Baseball Games Over Time," Journal of Sports Economics, , vol. 13(5), pages 536-553, October.
    3. Drayer, Joris & Rascher, Daniel A. & McEvoy, Chad D., 2012. "An examination of underlying consumer demand and sport pricing using secondary market data," Sport Management Review, Elsevier, vol. 15(4), pages 448-460.
    4. Shapiro, Stephen L. & Drayer, Joris, 2014. "An examination of dynamic ticket pricing and secondary market price determinants in Major League Baseball," Sport Management Review, Elsevier, vol. 17(2), pages 145-159.
    5. Chmait, Nader & Robertson, Sam & Westerbeek, Hans & Eime, Rochelle & Sellitto, Carmine & Reid, Machar, 2020. "Tennis superstars: The relationship between star status and demand for tickets," Sport Management Review, Elsevier, vol. 23(2), pages 330-347.
    6. Övünç Yılmaz & Rob F. Easley & Mark E. Ferguson, 2023. "The future of sports ticketing: Technologies, data, and new strategies," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 22(3), pages 219-230, June.
    7. Alan L. Morse & Stephen L. Shapiro & Chad D. McEvoy & Daniel A. Rascher, 2008. "The Effects of Roster Turnover on Demand in the National Basketball Association," International Journal of Sport Finance, Fitness Information Technology, vol. 3(1), pages 8-18, February.
    8. Mehmet Şahin, 2019. "Optimization of dynamic ticket pricing parameters," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 18(4), pages 306-316, August.
    9. Malasevska, Iveta & Haugom, Erik, 2018. "Optimal prices for alpine ski passes," Tourism Management, Elsevier, vol. 64(C), pages 291-302.
    10. Tim Dittmer & Bob Carbaugh, 2014. "Major League Baseball: Dynamic Ticket Pricing and Measurement Costs," Journal for Economic Educators, Middle Tennessee State University, Business and Economic Research Center, vol. 14(1), pages 44-57, Fall.
    11. Ronald J. Huefner, 2017. "Value-based pricing in professional sports," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 16(1), pages 30-39, February.
    12. Young Dae Ko & Seung Hwan Jung & Sung Hee Kim & Sung Wook Lee, 2018. "Sustainable Sport Scheduling Approach Considering Team Equity for the Korean Professional Baseball League," Sustainability, MDPI, vol. 10(2), pages 1-11, February.
    13. Daniel, Rascher & Andrew, Schwarz, 2010. "Illustrations of Price Discrimination in Baseball," MPRA Paper 25807, University Library of Munich, Germany.
    14. Pascal Courty & Luke Davey, 2020. "The Impact of Variable Pricing, Dynamic Pricing, and Sponsored Secondary Markets in Major League Baseball," Journal of Sports Economics, , vol. 21(2), pages 115-138, February.

    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. Stefan Szymanski, 2021. "On the Incidence of an Ad Valorem Tax: The Adoption of VAT in the UK and Cost Pass Through by English Football Clubs," De Economist, Springer, vol. 169(1), pages 37-61, February.
    2. Smith Erin E & Groetzinger Jon D., 2010. "Do Fans Matter? The Effect of Attendance on the Outcomes of Major League Baseball Games," Journal of Quantitative Analysis in Sports, De Gruyter, vol. 6(1), pages 1-24, January.
    3. Ricard Gil & Wesley Hartmann, 2007. "The Role and Determinants of Concession Sales in Movie Theaters: Evidence from the Spanish Exhibition Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 30(4), pages 325-347, June.
    4. Ricard Gil & Wesley R. Hartmann, 2009. "Empirical Analysis of Metering Price Discrimination: Evidence from Concession Sales at Movie Theaters," Marketing Science, INFORMS, vol. 28(6), pages 1046-1062, 11-12.
    5. Jaume García & Plácido Rodríguez, 2002. "The Determinants of Football Match Attendance Revisited," Journal of Sports Economics, , vol. 3(1), pages 18-38, February.
    6. Mehmet Şahin, 2019. "Optimization of dynamic ticket pricing parameters," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 18(4), pages 306-316, August.
    7. Budzinski, Oliver & Feddersen, Arne, 2015. "Grundlagen der Sportnachfrage: Theorie und Empirie der Einflussfaktoren auf die Zuschauernachfrage," Ilmenau Economics Discussion Papers 94, Ilmenau University of Technology, Institute of Economics.
    8. Mark A. Diehl & Joel G. Maxcy & Joris Drayer, 2015. "Price Elasticity of Demand in the Secondary Market," Journal of Sports Economics, , vol. 16(6), pages 557-575, August.
    9. Daniel, Rascher & Andrew, Schwarz, 2010. "Illustrations of Price Discrimination in Baseball," MPRA Paper 25807, University Library of Munich, Germany.
    10. Matthew T. Brown & Daniel A. Rascher & Wesley M. Ward, 2006. "The Use of Public Funds for Private Benefit: An Examination of the Relationship Between Public Stadium Funding and Ticket Prices in the National Football League," International Journal of Sport Finance, Fitness Information Technology, vol. 1(2), pages 109-118, May.
    11. Dong C. Won & Young H. Lee, 2008. "Optimal dynamic pricing for sports games with habitual attendance," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(8), pages 639-655.
    12. McEvoy, Chad D. & Nagel, Mark S. & DeSchriver, Timothy D. & Brown, Matthew T., 2005. "Facility Age and Attendance in Major League Baseball," Sport Management Review, Elsevier, vol. 8(1), pages 19-41, May.
    13. Ricard Gil & Evsen Korkmaz & Ozge Sahin, 2020. "Can free-shipping hurt online retailers?," Quantitative Marketing and Economics (QME), Springer, vol. 18(3), pages 305-342, September.
    14. Ricard Gil & Evsen Korkmaz & Ozge Sahin, 0. "Can free-shipping hurt online retailers?," Quantitative Marketing and Economics (QME), Springer, vol. 0, pages 1-38.
    15. Daniel A. Rascher & John Paul G. Solmes, 2007. "Do Fans Want Close Contests? A Test of the Uncertainty of Outcome Hypothesis in the National Basketball Association," International Journal of Sport Finance, Fitness Information Technology, vol. 2(3), pages 130-141, August.
    16. Paul Madden, 2008. "Price, quality and welfare consequences of alternative club objectives in a professional sport league," Economics Discussion Paper Series 0802, Economics, The University of Manchester.
    17. Ricard Gil & Evsen Korkmaz & Ozge Sahin, 2014. "Optimal Pricing of Access and Secondary Goods with Repeat Purchases: Evidence from Online Grocery Shopping and Delivery Fees," Working Papers 14-10, NET Institute.
    18. Li, Chenguang & Sexton, Richard J., 2009. "Impacts of Retailers’ Pricing Strategies for Produce Commodities on Farmer Welfare," 2009 Conference, August 16-22, 2009, Beijing, China 51720, International Association of Agricultural Economists.
    19. Russell Ormiston, 2014. "Attendance Effects of Star Pitchers in Major League Baseball," Journal of Sports Economics, , vol. 15(4), pages 338-364, August.
    20. Elise M. Beckman & Wenqiang Cai & Rebecca M. Esrock & Robert J. Lemke, 2012. "Explaining Game-to-Game Ticket Sales for Major League Baseball Games Over Time," Journal of Sports Economics, , vol. 13(5), pages 536-553, October.

    More about this item

    Keywords

    baseball; variable pricing; dynamic pricing; regression; censored regression;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • 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:pra:mprapa:25803. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    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.