The Demand for NFL Attendance: A Rational Addiction Model

Abstract:     
This paper examines the demand for attendance at National Football League (NFL) games using a rational addiction model to test the hypothesis that professional football displays the properties of a habit-forming good. Rational addiction theory suggests that past and future consumption play a part in determining the current period's consumption for habit-forming goods. A pooled data set is collected using statistics from each NFL team from the 1983 to the 2002 seasons. Current attendance is modeled as a function of team specific variables including past and future attendance, ticket price, and team performance as well as league variables such as the incidence of strikes. The model is estimated using Two-Stage Least Squares (2SLS). It is found that past and future attendance, winning percentage, the age of the stadium in which a team plays, and the occurrence of strikes are significant factors in the determination of attendance at NFL games. The fact that coefficients for past and future attendance are positive and significant in this analysis lends support to the notion that NFL fans display characteristics of rational addiction in their consumption behavior.

Keywords: Sports attendance, rational addiction, NFL demand

JEL Classifications: D12

Working Paper Series