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Monday, May 05, 2008
The Economics of Baseball Fandom

From Daniel Hamermesh at Freakonomics:

A recent article notes that attendance in Major League Baseball parks is actually above last year, despite, so the story says, the economic downturn (recession?).

But despite is incorrect — it should be “because” of the economic downturn. The story notes that cheap seats at the Dodgers Stadium go for $8 to $13. Not bad for three plus hours of entertainment; but in good times who can afford that time?

In bad times, when the opportunity cost of time is reduced, the total price of an afternoon at the ballpark is lower for many people than it is when jobs are more plentiful. I see this in my own planning. Though I like baseball, I haven’t been to an M.L.B. game in over five years — I’ve been working too hard; but I do plan to attend more once I partially retire and the opportunity cost of my time drops.

Baseball watching is a time-intensive activity; and when time becomes “cheaper” for many people, as it does in a recession, it’s not surprising that the demand for watching M.L.B. games rises. The price of the complementary good to the ticket price — the price of one’s time — has fallen.

This might explain why one of the historic heydays for baseball was the 1930s, the worst economic period in the country's history.

(H/T: My colleague Tom Baker at FIU)


Attendance is one thing, but what about profits? I remember working on ticket pricing feasability studies a few years ago, and of course, the highest attendance does not always mean the highest profits. While people can afford to spend $12 on entertainment, can they afford to spend an additional $20 for a hot-dog and a cold one? or a bag of peanuts and a coke... add to that two hungry kids and your peeling off your twenties like there is no tomorow...

Have you seen any numbers on the overall profits? It would be intersting to see if they line up with attendance.

Interesting take on sociology/economics of sports though.

Blogger Jimmy H -- 5/05/2008 3:23 PM  

The notion that baseball was prosperous during the depression is not remotely accurate. During the height of the depression, 1931-1936, attendance at MLB games was below that of any year in the 1920's.

Other than 1930, there is no year in the 1930's where attendance at MLB games was as high as any year between 1924 and 1929.

That's why they started night baseball. Attendance in the 1930's for baseball was not good.

Maybe someone is confusing baseball with pari-mutuel horse racing. Horse racing - as one could see by viewing Seabiscuit - prospered in the late 1930's. Baseball did not.

See for the stats.

Anonymous Anonymous -- 5/05/2008 4:41 PM  

If they really wanted to see attendance shoot up during these trying times, they'd lower the prices of their beer. The possibility of baseball and cheap beer in the afternoon? I'd be drafting an amendment to the constitution to let Bush Jr. have one one more go at it.

Anonymous Anonymous -- 5/06/2008 1:39 PM  

Just went to a game at Dodger Stadium Friday. Tried to get a $9 ticket but couldn't.

Ticket cost me $23. Parking was $15. Hot dog, pretzel, soda was $14.25. Program was $5.

Total: $57.25. One game, one guy. And there were 52,000 other people just like me in the place. I realize LA's not like every other city, but that's one example of a team that's not hurting.

Blogger Tim -- 5/12/2008 2:33 PM  

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