Download Competitive Balance and Attendance in Major League Baseball: An

Gregory Gay
Overview
 Written by Brian Soebbing
 Discussion
 Competitive Balance
 AISDR
 UOH
 Create a model which
determines if fans are
sensitive to competitive
imbalance and team
performance
Competitive Balance
 The degree of balance among teams
 Standard Deviation of Winning Percentage (SDWP)
 Examines the dispersion of win percent within an entire
league for a season
 Limited due to the number of games in a season
AISDR
 Actual to Idealized Standard Deviation Ratio
 Created to counter the SDWP limitation
 AISDR for a league is .500/√G
 G # of games in a season
 The closer the ratio is to 1 the better the competitive
balance
UOH
 Uncertainty of Outcome
Hypothesis
 The more even team
abilities are, the less
certain the game’s
outcome
 Therefore a greater
attendance is expected
 The number of games
behind the leader is one of
the best measurements of
demand
 Attendance is greater for
the home team in close
games
 As a result the probability
of a home team winning is
positive and significant
The Empirical Model
 I = teams t = seasons
u=explanatory term
 Ô = a fixed effect parameter for each team
Summary Statistics
Regression Results
Results
 Model covers only 67% of the variation
 Variables such as market population, market income, and
ticket prices
 These variables are difficult to accurately calculate
 AISDR is negative and significant
 Confirms UOH
 Fans are sensitive to league-wide performance
 Games behind a playoff berth variable is negative and
significant
 Fans are sensitive to individual team performance
Conclusion
 Using results can help MLB policy makers create an
optimal match between competitive balance and team
performance
 Maximizes attendance