If You Build It, Will They Come? Attendance and New Stadium Construction
Donald A. Coffin
Major league baseball provides a rich source of information for researchers seeking to understand the functioning of markets. Both individual and team performance are extremely well documented, so that identifying and measuring the quality of output can be done quite readily. New teams and new facilities can be identified as well. In addition, teams have a long tradition of reporting on a daily basis the attendance at games, simplifying the measurement of the popularity of the games.
These features have led to a large literature on the economics of baseball [ Quirk and Fort ( 1992), Scully ( 1989), Somers ( 1992), and Zimbalist ( 1992a) all contain extensive bibliographies]. In the course of this work, many economists have examined attendance and the forces affecting it. Much of this analysis, however, deals either with the analysis of individual game attendance ("within-season" studies) or with only a single season or, at most, two or three seasons. In this chapter, I use a longer time-series to estimate the demand for attendance at major league baseball games, and I use that estimated demand curve to address an important question for states and local governments: Will building a new baseball facility generate sufficient revenue to make the investment worthwhile?
In succeeding sections, I examine other studies of attendance, present my analysis of attendance and identify how my results differ from those of previous studies, and conclude with a discussion of new stadium construction. One note on terminology may be useful at this point. My primary focus is on annual attendance, by team. When I refer to average attendance, that refers to total attendance in major league baseball in a particular year, divided by the number of teams.