Academic journal article Atlantic Economic Journal

Win a World Series, Raise Ticket Prices. but, Excessively?

Academic journal article Atlantic Economic Journal

Win a World Series, Raise Ticket Prices. but, Excessively?

Article excerpt

JEL L83

The Boston Red Sox celebrated wildly on the field in St. Louis in October 2004, having just completed a sweep of the Cardinals and ending an 86-year World Series championship drought. Prior to the 2004 season, diehard Red Sox fans would have been willing to pay practically anything to see their beloved Red Sox break the "Curse of the Bambino." However, in the spring of 2005, the Red Sox announced ticket prices for the coming season and many fans experienced sticker shock. Ticket prices in Boston climbed 9.3% to a league-high $44.56 (http://money.cnn.com/2005/ 04/04/news/funny/baseball_ticket_prices/). Was the 9.3% increase commensurate with ticket price increase elsewhere or were Red Sox fans paying the price of winning a championship?

Does a World Series championship in Major League Baseball (MLB) translate into significantly higher ticket prices in the following season? If winning a title increases the demand for tickets, then ceteris paribus ticket prices should rise. As other teams attempt to improve team quality to become more competitive, their ticket prices will also rise. Presumably, ticket sales are sensitive to the previous season's standing and higher winning percentages have led to higher ticket prices [P.M. Sommers (1994), "Ticket Prices and Players Salaries in Major League Baseball," Journal of Recreational Mathematics, 26(4), 274-276], but will ticket prices for World Series champions rise even higher? Using data on ticket prices for all teams over the period 1991 to 2006, we find that owners of a World Series champion increase ticket prices differently from the rest of the league.

Ticket price data are from http://rodneyfort.com/PHSportsEcon/SportsEcon.htm and were used to find the average ticket price increase (all of which are weighted averages by seat type) for World Series winners and all other teams in MLB from 1991 to 2005 (excluding 1994, when, in August, the players went on strike, leading to cancellation of the remainder of the season, including the World Series). …

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