Variable Ticket Pricing in Major League Baseball

Journal of Sport Management, Forthcoming

55 Pages Posted: 24 Aug 2006

See all articles by Daniel A. Rascher

Daniel A. Rascher

University of San Francisco - Sport Management Program; SportsEconomics

Chad D. McEvoy

Syracuse University - David B. Falk College of Sport and Human Dynamics; Illinois State University

Mark Nagel

University of South Carolina

Matthew T. Brown

University of South Carolina

Abstract

Sport teams have historically been reluctant to change ticket prices during the season. Recently, however, numerous sport organizations have implemented variable ticket pricing in an effort to maximize revenues. In Major League Baseball, variable pricing results in ticket price increases or decreases depending on factors such as quality of the opponent, day of the week, month of the year, and for special events such as opening day, Memorial Day and Independence Day (July 4). Using censored regression and elasticity analysis, this paper demonstrates that variable pricing would have yielded approximately $590,000 per year in additional ticket revenue for each Major League team in 1996, ceteris paribus. Accounting for capacity constraints, this amounts to only about a 2.8% increase above what occurs when prices are not varied. For the 1996 season, the largest revenue gain would have been the Cleveland Indians, who would have generated an extra $1.4 million in revenue. The largest percentage revenue gain would have been the San Francisco Giants. The Giants would have seen an estimated 6.7% increase in revenue had they used optimal variable pricing.

Keywords: Ticket Pricing, Baseball, Sports Economics

JEL Classification: L11, L83

Suggested Citation

Rascher, Daniel A. and McEvoy, Chad D. and Nagel, Mark and Brown, Matthew T., Variable Ticket Pricing in Major League Baseball. Journal of Sport Management, Forthcoming. Available at SSRN: https://ssrn.com/abstract=926190

Daniel A. Rascher (Contact Author)

University of San Francisco - Sport Management Program ( email )

San Francisco, CA 94117
United States

SportsEconomics ( email )

2200 Powell St.
Emeryville, CA 94608
United States

Chad D. McEvoy

Syracuse University - David B. Falk College of Sport and Human Dynamics ( email )

900 S. Crouse Avenue
Syracuse, NY 13244-2130
United States

Illinois State University ( email )

Normal, IL 61790
United States

Mark Nagel

University of South Carolina ( email )

701 Main Street
Columbia, SC 29208
United States

Matthew T. Brown

University of South Carolina ( email )

701 Main Street
Columbia, SC 29208
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
806
Abstract Views
4,062
rank
28,994
PlumX Metrics