Investigations into the level of competitive balance within the four major North American professional team sports leagues suggest that the National Basketball Association (NBA) exhibits the lowest level of competitive balance. Given the role competitive balance plays in maintaining consumer demand, the authors examine the role the star attractions of the NBA play in promoting fan interest. The evidence presented suggests the choice of functional form alters the significance of the relationships uncovered. Specifically, the significance of star power is only uncovered in a multiplicative model rather than in the commonly employed linear form. Additional empirical results are reported in the text.
Get full access to this article
View all access options for this article.
References
1.
Atre, T., Auns, K., Badenhausen, K., McAuliffe, K., Nikolov, C., & Ozanian, M. K. (1996, May 20). The high stakes game of team ownership. Financial World, 165(8), 49-64.
2.
Badenhausen, K., Nikolov, C., Alkin, M., & Ozanian, M. K. (1997, June 17). Sports values: More than a game. Financial World, 166(6), 40-50.
3.
Berri, D. J. (In press). Is there a short supply of tall people in the college game. In J. Fizel& R. Fort (Eds.), Economics of collegiate sports. New York: Praeger.
4.
Berri, D. J., & Brook, S. L. (1999). Trading players in the NBA: For better or worse. In J. L. Fizel, E. Gustafson, & L. Hadley (Eds.), Sports economics: Current research. New York: Praeger.
5.
Berri, D. J., & Vicente-Mayoral, R. (2001). The short supply of tall people: Explaining competitive imbalance in the National Basketball Association. Unpublished manuscript.
6.
Blass, A. A. (1992). Does the baseball labor market contradict the human capital model of investment? Review of Economics and Statistics, 74, 261-268.
7.
Borland, J., & Lye, J. (1992, September). Attendance at Australian rule football: A panel study. Applied Economics, 24(9), 1053-1058.
8.
Box, G. E. P., & Cox, D. R. (1964). An analysis of transformation. Journal of the Royal Statistical Society, 26(Series B), 211-243.
9.
Brown, E., Spiro, R., & Keenan, D. (1991, July). Wage and non-wage discrimination in professional basketball: Do fans affect it? American Journal of Economics and Sociology, 50(3), 333-345.
10.
Burdekin, R. C., & Idson, T. L. (1991). Customer preferences, attendance and the racial structure of professional basketball teams. Applied Economics, 23,179-186.
11.
Burger, J. D., & Walters, S. J. K. (2003). Market size, pay and performance: A general model and application to Major League Baseball. Journal of Sports Economics, 4(2), 108-125.
12.
Coase, R. H. (1960). The problem of social cost. Journal of Law and Economics, 3, 1-44.
13.
Demmert, H. (1973). The economics of professional team sports. Lexington, MA: Lexington Books.
14.
El-Hodiri, M., & Quirk, J. (1971, November-December). The economic theory of a professional sports league. Journal of Political Economy, 79, 1302-1319.
15.
Fort, R. (In press). Inelastic sports pricing. Managerial and Decision Economics.
16.
Fort, R., & Quirk, J. (1995, September). Cross-subsidization, incentives, and outcomes in professional team sports. Journal of Economic Literature, 33, 1265-1299.
17.
Fort, R., & Quirk, J. (1996). Over-stated exploitation: Monopsony versus revenue sharing in sports leagues. In J. Fizel, E. Gustafson, & L. Hadley (Eds.), Baseball economics: Current research. New York: Praeger.
18.
Hausman, J. A., & Leonard, G. K. (1997). Superstars in the National Basketball Association: Economic value and policy. Journal of Labor Economics, 15(4), 586-624.
19.
Heilmann, R. L., & Wendling, W. R. (1976). A note on optimum pricing strategies for sports events. In R. E. Machol, S. P. Ladany, & D. G. Morrison (Eds.), Management science in sports. Amsterdam: North-Holland.
20.
Hoang, H., & Rascher, D. (1999, January). The NBA, exit discrimination, and career earning. Industrial Relations, 38(1), 69-91.
21.
Jennett, N. I. (1984). Attendance, uncertainty of outcome and policy in Scottish League Football. Scottish Journal of Political Economy, 31(2), 176-198.
22.
Kahane, L., & Shmanske, S. (1997, April). Team roster turnover and attendance in Major League Baseball. Applied Economics, 29(4), 425-431.
23.
Knowles, G., Sherony, K., & Haupert, M. (1992, fall). The demand for Major League Baseball: A test of the uncertainty of outcome hypothesis. The American Economist, 36(2), 72-80.
24.
Medoff, M. (1986). Baseball attendance and fan discrimination. Journal of Behavioral Economics, 15, 149-155.
25.
Medoff, M. H. (1976). On monopsonistic exploitation in professional baseball. Quarterly Review of Economics and Business, 16, 113-121.
26.
Missouri State Census Data Center. (2001). Post-1990 population estimates for US counties & higher level geographies by age, race, sex, and Hispanic origin thru 1999. Retrieved from www.oseda.missouri.edu/uic/uiccapps/agersex.html
27.
Neale, W. (1964). The peculiar economics of professional sports. Quarterly Journal of Economics, 78(1), 1-14.
28.
Noll, R. (1974). Attendance and price setting. In R. Noll (Ed.), Government and the sports business. Washington, DC: Brookings Institution.
29.
Noll, R. (1988). Professional basketball(Working Paper No. 144). Palo Alto, CA: Stanford University.
30.
Ozanian, M. K., Atre, T., Fink, R., Reingold, J., Kimelman, J., Osterland, A., et al. (1995). Suite deals: Why new stadiums are shaking up the pecking order of sports franchises. Financial World, 164(11), 42-60.
31.
Ozanian, M. K., Fink, R., Kimelman, J., Reingold, J., Osterland, A., Starr, J., et al. (1994). The $11 billion pastime. Financial World, 163(10), 50-63.
32.
Peel, D., & Thomas, D. (1988, August). Outcome uncertainty and the demand for football: An analysis of match attendance in the English Football League. Scottish Journal of Political Economy, 35(3), 242-249.
33.
Quirk, J., & Fort, R. (1992). Pay dirt: The business of professional team sports. Princeton, NJ: Princeton University Press.
34.
Rascher, D. (1999). A test of the optimal positive production network externality in Major League Baseball. In J. Fizel, E. Gustafson, & L. Hadley (Eds.), Sports economics: Current research (pp. 27-45). New York: Praeger.
35.
Rottenberg, S. (1956, June). The baseball player’s labor market. Journal of Political Economy, pp. 242-258.
36.
Schmidt, M. B., & Berri, D. J. (2001). Competition and attendance: The case of Major League Baseball. Journal of Sports Economics, 2(2), 147-167.
37.
Scott, F., Jr., Long, J., & Sompii, K. (1985). Salary vs. marginal revenue product under monopsony and competition: The case of professional basketball. Atlantic Economic Journal, 13(3), 50-59.
38.
Scully, G. (1989). The business of Major League Baseball. Chicago: University of Chicago Press.
39.
Scully, G. W. (1974). Pay and performance in Major League Baseball. American Economic Review, 64, 917-930.
40.
Shmanske, S. (1998, July). Price discrimination at the links. Contemporary Economic Policy, 16, 368-378.
41.
Sommers, P. M., & Quinton, N. (1982). Pay and performance in baseball: The case of the first family of free agents. Journal of Human Resources, 17, 426-436.
42.
The Sporting News: Official NBA Guide. (1993-1996). St. Louis, MO: Author.
43.
The Sporting News: Official NBA Register. (1993-1996). St. Louis, MO: Author.
44.
U.S. Bureau of Economic Analysis. (1992-1996). Survey of current business. Washington, DC: U.S. Department of Commerce.
45.
U.S. Bureau of Labor Statistics. (1992-1996). Monthly labor review. Washington, DC: U.S. Department of Labor.
46.
Zarembka, P. (1968). Functional form in the demand for money. Journal of the American Statistical Association, 63(322), 502-511.
47.
Zimbalist, A. (1992). Baseball and billions. New York: Basic Books.
