Wednesday, July 9, 2008

Baseball attendance

Today we started talking about the economics of baseball. Teams make money by selling tickets, concessions, and advertising. Teams want to have fans attend games. But we saw that there is a lot of variation in the average attendance among teams. Particular teams such as the Yankees, Mets, and Red Sox get large attendances, while other teams such as the Marlins the Royals have small attendances.

Why do the average attendances between teams vary so much? I suggested a couple of possible reasons.

1. Market size. The market refers to the population of people who potentially can attend a game. The market size varies greatly among teams. Big cities such as New York, Los Angeles, and Chicago have large markets, while small cities such as Kansas City and Pittsburgh have small markets.

2. Team success. It would seem that winning teams (either in the present or in the past) would be a factor -- one would think that winning teams would draw more fans.

Today we looked at the relationship between average attendance and variables such as market size and team success. What did we learn?

1. There is a clear positive relationship between market size and average attendance. Simply, larger markets tend to draw more fans. There are some exceptions to this pattern. For example, St. Louis tends to draw many fans despite a small market. The Indians did well in drawing fans in the first years of a new ballpark.

2. There doesn't appear to be a relationship between the current winning percentage of a team and its average attendance. Maybe many of the tickets are purchased at the beginning of the season.

Next class, we'll focus on the different costs of attending a baseball game and see if these costs are related to the teams' payroll.

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