The Benefits of College Athletic Success: An Application of the Propensity Score Design with Instrumental Variables

Michael Anderson

No 18196, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Spending on big-time college athletics is often justified on the grounds that athletic success attracts students and raises donations. Testing this claim has proven difficult because success is not randomly assigned. We exploit data on bookmaker spreads to estimate the probability of winning each game for college football teams. We then condition on these probabilities using a propensity score design to estimate the effects of winning on donations, applications, and enrollment. The resulting estimates represent causal effects under the assumption that, conditional on bookmaker spreads, winning is uncorrelated with potential outcomes. Two complications arise in our design. First, team wins evolve dynamically throughout the season. Second, winning a game early in the season reveals that a team is better than anticipated and thus increases expected season wins by more than one-for-one. We address these complications by combining an instrumental variables-type estimator with the propensity score design. We find that winning reduces acceptance rates and increases donations, applications, academic reputation, in-state enrollment, and incoming SAT scores.

JEL-codes: C23 C26 I20 I23 J24 (search for similar items in EconPapers)
Date: 2012-06
New Economics Papers: this item is included in nep-lab and nep-spo
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Citations: View citations in EconPapers (15)

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