The (Monetary) Value of Competitive Balance for Sport Consumers: A Stated Preferences Approach to European Professional Football

Ilmenau Economics Discussion Papers, Vol. 17, No. 77, October 2012

23 Pages Posted: 17 Oct 2012

See all articles by Tim Pawlowski

Tim Pawlowski

University of Tübingen

Oliver Budzinski

Ilmenau University of Technology

Date Written: October 17, 2012

Abstract

Ever since the pioneering work of Rottenberg (1956) and Neale (1964), the uncertainty of outcome hypothesis (UOH) has played a major role in the economic analysis of professional sport leagues. However, decades of empirical research have not been successful in establishing clear evidence for the importance of competitive balance (CB) for attendance or TV viewers in European professional football. In order to find possible reasons for the gap between the UOH and (the lack of) its empirical validation, our paper adopts a stated preference approach focused on the fans’ perception of CB and its relevance in three European professional football leagues. The results indicate that a tipping point/threshold value of CB exists and that crossing this threshold can lead to massive demand reactions. However, since the threshold has not been reached in the leagues included in the sample, the paper provides a possible explanation for the above mentioned gap.

Keywords: willingness-to-pay, competitive balance, uncertainty of outcome hypothesis, European Football

JEL Classification: D12, L83

Suggested Citation

Pawlowski, Tim and Budzinski, Oliver, The (Monetary) Value of Competitive Balance for Sport Consumers: A Stated Preferences Approach to European Professional Football (October 17, 2012). Ilmenau Economics Discussion Papers, Vol. 17, No. 77, October 2012, Available at SSRN: https://ssrn.com/abstract=2163095 or http://dx.doi.org/10.2139/ssrn.2163095

Tim Pawlowski

University of Tübingen ( email )

Wilhelmstrasse 124
Tuebingen, Baden-Wuerttemberg 72074
Germany

Oliver Budzinski (Contact Author)

Ilmenau University of Technology ( email )

Ilmenau, D-98684
Germany

HOME PAGE: http://www.tu-ilmenau.de/wth

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