Multiproduct Pricing in Major League Baseball: A Principal Components Analysis

15 Pages Posted: 21 Mar 2011

See all articles by Craig. A. Depken II

Craig. A. Depken II

affiliation not provided to SSRN

Darren P. Grant

Sam Houston State University - College of Business Administration - Department of Economics and International Business

Abstract

The empirical analysis of multiproduct pricing lacks clear theoretical guidance and appropriate data, which often render traditional regression-based analyses impractical. Under these circumstances the factors underlying price variation can be inferred using a new methodology based on principal components. Analyzing ticket, parking, and concession pricing in Major League Baseball with this methodology demonstrates that general demand shifts are the primary factor, but explain only half of overall price variation. Also important are price interactions deriving from demand interrelationships between goods and attempts to maximize the capture of consumer surplus in the presence of heterogeneous demand.

JEL Classification: D40, L11, L13

Suggested Citation

Depken II, Craig. A. and Grant, Darren P., Multiproduct Pricing in Major League Baseball: A Principal Components Analysis. Economic Inquiry, Vol. 49, No. 2, pp. 474-488, 2011. Available at SSRN: https://ssrn.com/abstract=1790157 or http://dx.doi.org/10.1111/j.1465-7295.2010.00263.x

Craig. A. Depken II

affiliation not provided to SSRN

No Address Available

Darren P. Grant (Contact Author)

Sam Houston State University - College of Business Administration - Department of Economics and International Business ( email )

SHSU Box 2118
Huntsville, TX 77341-2118
United States
936-294-4324 (Phone)

HOME PAGE: http://www.shsu.edu/dpg006

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