By Robbie Butler

The 4th sportseconomics.org workshop will be held on Monday 23rd and Tuesday 24th of July 2018 at University College Cork. The event is being hosted by the Centre for Analysis and Risk.

The theme of these year's event is sports betting and a selection of technical academic papers in the area will be presented over the two days. 

​General Information

Betting on sports is an enormously popular activity, which earns significant revenues, enhances many fans’ sense of emotional involvement with sports, and, on the downside, causes substantial welfare loss to people who gamble recklessly or addictively. For the economist interested in people’s preferences over risk, and the interaction of these preferences with their beliefs about probabilities, sports betting provides a field setting almost ideally designed for supporting rich inferences. Policy makers and regulators who have responsibilities associated with sports, leisure, and gambling can gain crucial insights into, and predictive leverage over, responses to changes in odds and incentives through observations of naturally occurring sports betting, as well as through economists’ laboratory and field experiments with punters. The CEAR workshop on Sports Betting brings together both researchers who specialize in the economics of sport, and theoretical and experimental risk specialists who use sports betting contexts as environments for establishing more general insights into risky choice.

Conference Program

Monday July 23
​
9:15 – 9:45        Launch of the UCC Centre for Sports Economics and Law
9:45 – 10:00      Workshop welcome and Background on CEAR
10:00 – 11:00    Filippos Papakonstantinou: History-dependent risk preferences: Evidence from individual choices                               and implications for the disposition effect

11:15 – 12:15    Angie Andrikogiannopoulou: Heterogeneity in risk preferences: Evidence from a real-world betting                              market
12:15 – 1:15      Glenn Harrison & Eberhard Feess: Welfare Evaluation of Sports Betting Conditioned on Elicited                                  Risk Preferences and Subjective Beliefs


2:30 – 3:30        Sylvan Herskowitz: Gambling, Saving, and Lumpy Liquidity Needs
3:30 – 4:30        Amit Gandhi: TBA

Tuesday July 24

9:30 – 10:30      Raymond Sauer: TBA
10:30 – 11:30    Rob Simmons: Betting Markets, Outcome Uncertainty and Competitive Balance in Sports: What                                    Have We Learned?

11:45 – 12:45    Brad Humphreys: A Simple Test of Semi-Strong Form Market Efficiency Using US College Sports                                Betting Data

2:00 – 3:00        Alasdair Brown: The Use of Framing Manipulations By Victorian Bookmakers
3:00 – 4:00        David Butler, Robbie Butler and Justin Doran: Turf Accountancy - A Spatial Analysis of                                              Bookmakers
4:00 - 4:05         Close 

by Declan Jordan

The Regional Science Association International - British and Irish Section hosts its annual conference in late August. Next year I am hoping to organise a special session on the spatial aspects of sports performance and the spatial impact of sports investment. The 46th annual RSAIBIS Conference will take place in 2017 in Harrogate in Yorkshire on August 23rd and 24th. This is a week before the European Sports Economists Association Conference in Paderborn.

That economic activity tends to concentrate across locations is a now a well-observed stylised fact. Regional economics has a long-standing literature on the effects of location on business performance (using an array of measures), economic growth, well-being, and This literature considers the impact of place on economic, and the impact of the activities of economic agents on the place in which they are located.

To date, there is a lack of spatial analysis of sports performance, management, and development. This is despite the clear differences in participation, popularity, and performance of different sports across space. Also, within individual sports there are differences in performance of clubs in different locations, and the extent to which this is facilitated by the characteristics of the location is under-researched. Most spatial analyses involving sport have focused on the impact on local or regional effects of large sports-related infrastructural or mega-event investments. 

If you would like further information about the special session and/or would like to submit an abstract please contact me as session organiser at d.jordan@ucc.ie.

by Declan Jordan

The Economic and Social Review (Ireland's leading journal for economics and applied social science) publishes two sports economics articles in its latest issue. One of the articles is written by colleagues in UCC and this blog (the Butler Brothers). The other is an article by Barry Reilly of the University of Sussex on the demand for League of Ireland football, specifically Premier Division football.
 
This paper is particularly timely given current debates within the league and the Irish football community generally on the contents of the Conroy Report on the sustainability of the league. The paper is a very welcome contribution to the Irish sports economics literature. This is the first paper of which I am aware that conducts such a robust analysis of the determinants of demand for the league. This might primarily due to data limitations, with attendance figures for the league only recently being available more generally and being somewhat reliable. It is notable that the attendance data (sourced from extratime.ie) are, for some clubs, estimates from journalists and others in attendance rather than official club or league records.
 
The paper structures the determinants of demand around three groups of variables, expected match quality, outcome uncertainty and opportunity costs for supporters. The findings are consistent with studies for lower leagues in England and in general are unsurprising. The evidence though shatters some dearly held myths about League of Ireland attendances. For example, there is a perception that club supporters would tire of games involving the same Dublin teams too frequently in a season, but the paper finds that derbies (in Ireland these are almost completely between Dublin clubs) are strongly positive effects. Also, live TV broadcast of the game (or another game at the same time) has no significant effect on attendance and the weather seems to be irrelevant (either we League of Ireland fans are a hardy bunch or the switch to “summer soccer” has removed the weather as an important effect).
 
The key findings are that fixture quality, uncertainty of outcome (a better chance of a home win), geographical distance between the teams, recent team performance and seasonal competitive balance have positive effects on match attendance. The paper is comprehensive and should be used to inform decisions on restructuring and reform of the league. The author suggests that there is little evidence from his analysis that an increase in league size in justified and it is hard to disagree – since such a move would necessarily reduce the number of matches that had an important outcome at stake. The striking finding for me from the paper is the importance of outcome uncertainty – where “the perceived certainty of a match outcome adversely affects attendance for matches where the ex ante  home win probability is 0.25 or less” (page 504), and particularly that a fifth of matches fall into this category. This is strong evidence against an increase in the size of the Premier Division.
 
The author however goes on to recommend a “sizeable reduction” in the size of the Premier Division – and I think the case is less convincing here. The author doesn’t indicate what a sizeable reduction would be. Currently the Premier Division has 12 teams and the Conroy Report has recommended a reduction to 10 from the 2017 season. Is there a point after which the size of the Premier Division works against it being a credible competition? Greater match quality is assumed to accrue from a greater concentration of playing talent in fewer clubs and that these clubs would then be of closer quality. This may very well be the case but the semi-professional (or for some clubs amateur) status may work against clubs attracting talent, particularly for provincial clubs. A good player may be indifferent to playing with one of the many Premier Division Dublin or nearby clubs but it is more difficult for provincial clubs to attract the better players from Dublin.  In his most recent book, using a different measure, Stefan Szymanski noted that the League of Ireland was the most competitive European league, so this would seem to suggest the status quo is working in terms of competitive balance.
 
The Conroy Report refers (and the paper also makes passing reference) to having more games where something is at stake. This is not necessarily increased with fewer clubs (although more balanced clubs would likely mean greater uncertainty of outcome for individual games). The Conroy Report suggests having a break in the season where the division splits in two. In a previous post I suggested an MLS-style conference system with play-offs, which would keep clubs interested longer in the season.
 
Finally, although it is beyond the scope of Barry Reilly’s paper, the question needs to be asked about what the League of Ireland is for. If it is to generate greater interest (measured for example by attendances) then why not exclude clubs that have shown over many years that they cannot generate large crowds. Perhaps this occurs anyway with the loss of clubs like Monaghan United, Sporting Fingal and Dublin City – it is hardly likely that a club like UCD could be run on a commercial basis. However, if the league is intended to provide an outlet at senior level for as many Irish football supporters then a more regional structure is required and would need to be supported. It is relevant to note that only today the Irish Times reports that soccer is the most popular sport in Ireland – though this is hardly visible in attendances at League of Ireland grounds.
 
It is these questions that need to be answered before the league is reformed once again. The history of League of Ireland reform suggests that tinkering with league size or structure will fail to address medium to long-term sustainability without a fundamental soul-searching about the league among those who run it and care about it. Barry Reilly’s paper is a critical element in the discussions on what changes are needed, as (finally) we can point to evidence on which to base decisions.

by Declan Jordan

The use of football statistics are becoming more and more prevalent in economic analysis. This is partly because of the rich public data sets that the sport provides. In what is quite an interesting further development, a recent paper published in Social Indicators Research asks whether football data can be used as a measure of economic and social development (subscription is required - but an earlier open access version is available here). 

The authors, Roberto Gasquez and Vicente Royuela, econometrically test whether FIFA rankings of national teams can be used as an indicator of national development, to complement existing measures such as Gross Domestic Product (GDP) per capita or the World Bank's Human Development Index (HDI).

The paper refers to several studies that have tested for an effect of sport on development, which the authors argue have concentrated on the impact of sporting infrastructure on local or regional economies and have found equivocal results. Also, the authors review literature that indicates higher national income is a good indicator of sporting success. This paper justifies a potential relationship between sport and economic growth through sport's effects on health and educational attainment. However, these benefits may be seen where there is increased participation in sport and the authors don't satisfactorily make the case why better international performance (manifested in FIFA ranking) should affect health and education levels. The authors suggest there is a positive effect from international football success on productivity through increases in happiness and positive intangible effects, such as community spirit, self-confidence, pride, solidarity etc. The authors also suggest that greater migration of professional footballers from poorer countries to richer ones due to the globalisation of football may help development in the poorer countries, perhaps through remittances. The theoretical bases for football as an indictor of development is underwhelming. While certainly better international football performances can increase happiness and national prestige, it is unclear why these would be long-term effects and it is unclear why better African footballers in European leagues (for example) would improve economic conditions in Africa for anyone other than the footballer himself and his family.

The empirical analysis in the paper however clearly finds a strong association between FIFA ranking and GDP per capita and HDI. The relationship is particularly notable for developing countries. The authors accept that determining causality is not straightforward, but that a "significant association does exist" (page 840) and that football performance may be mirroring national institutions that strongly affect development.

The most important aspect of the paper, providing valuable insight for researchers of economic development, is that football performance may be a useful proxy measure of development. This is particularly where the availability of data is not as good as might be hoped ie developing countries.

Just more evidence of the bounty to social science researchers from football data.