TAKE ME OUT TO THE BALLGAME: AN ANALYSIS OF DEMAND FOR MAJOR LEAGUE BASEBALL TICKETS

Abstract

Demand for Major League Baseball tickets varies from game to game, and more so, from season to season. Researchers often claim that the heavy deviation in attendance exists almost exclusively due to the performance of the Major League Baseball teams playing the game (both the home team and the opponent.). While some other variables have been explored in the economic literature, performance is still always cited as the preeminent driver of attendance. Using both Major League Baseball data and IHS Global Insight panel data from 2004-2011, this paper represents the most in depth attempt to understand if local economic effects and managerial tactics account for any of the variation in Major League Baseball attendance. I find that a 1% increase in the unemployment rate of a standard metropolitan area causes a reduction of over 11,000 paying fans per season. Using median income, an increase of $1,000 for a standard metropolitan area enhances season long attendance by over 55,000 fans. Analyzing promotional tactics utilized by management, I find that there are a number of instruments at a Major League Baseball team’s disposal to help increase attendance for games during the season. These results lay the groundwork for future study and show for the first time the impact that a local economy has on the demand for Major League Baseball tickets.