Date of Award

8-2005

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Applied Economics

Advisor

Dr. Raymond D. Sauer

Abstract

This thesis contains a collection of essays related to economics and sports. The final essay looks at the growing controversy of publicly funded sports stadiums. Local governments are spending millions of dollars on sports stadiums as a means to spur economic development. Economic impact studies supporting public funding claim that the investment will bring thousands of jobs and additional revenue to the local community. Most of the academic literature on the subject has been less favorable. Much of the literature focused on broad measures of employment in metropolitan statistical areas. In this paper regression analysis is used to investigate the impact of an NFL franchise on county employment growth. The goal of the paper is to determine whether there is any measurable economic benefits to justify the use of public funds to built sports stadiums.

The first essay examines the incentive for teams to invest in player talent in open and closed sports leagues. Sports leagues in North America are closed leagues that have a fixed set of teams. Entry is rare, requiring permission from incumbent teams. Outside of North America most leagues are open leagues that practice promotion and relegation. Entry into these leagues is primarily based on team performance. By solving for the equilibrium level of player talent, this research will show that under most conditions teams in an open league will spend more on player talent than teams in a closed league. The practice of promotion and relegation in an open league gives teams an additional incentive to invest in player talent that is not present in a closed league.

The second essay explores entry restrictions across several sports. Many of these sports are open but have several hierarchal levels of competition. Entry into the top tier of competition depends on the players' ability to perform at the lower levels. While most entry rules appear to increase the quality of play, some, such as age restrictions in the WT A, appear to be motivated by cartel behavior.

Included in

Economics Commons

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