Effects of Deflation and Macroeconomic Shocks on Leisure Spending in the Pre-War Era: Evidence from Major League Baseball, 1890–1940

Ran Tao, Richard C. K. Burdekin () and David Berri
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Ran Tao: Lake Forest College and University of Wisconsin
Richard C. K. Burdekin: Claremont McKenna College
David Berri: Southern Utah University

Atlantic Economic Journal, 2022, vol. 50, issue 3, No 3, 119-132

Abstract: Abstract Pre-war baseball attendance data afford a unique opportunity to assess how leisure spending fared not only through deflation but also after such shocks as the Spanish Flu of 1918 and the 1929 Wall Street Crash. Long-run analysis via a vector error correction model (VECM) reveals significant cointegration of baseball attendance with both prices and output. A long-run positive relationship with prices offers evidence of a negative impact of deflation on leisure spending, suggesting that deflation is indeed more to be feared than inflation. There are also apparent parallels between the post-pandemic boom in leisure spending in 1919 and the post-2020 experience.

Keywords: Leisure spending; Deflation; Baseball attendance; Spanish Flu; Wall Street crash; E39; Z20 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s11293-022-09756-3

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