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

Tim Pawlowski and Oliver Budzinski

International Journal of Sport Finance, 2013, vol. 8, issue 2, 112-123

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 (search for similar items in EconPapers)
JEL-codes: L83 (search for similar items in EconPapers)
Date: 2013
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Working Paper: The (monetary) value of competitive balance for sport consumers: A stated preferences approach to European professional football (2012)
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International Journal of Sport Finance is currently edited by Arne Feddersen, Babatunde Buraimo, Joachim Prinz and Jane Ruseski

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