Date

2016

Document Type

Dissertation

Degree

Doctor of Philosophy

Department

Economics

First Adviser

Thornton, Robert J.

Other advisers/committee members

Hyclak, Thomas J.; Timmons, Edward J.

Abstract

This dissertation research focuses on the intersection of labor and sports economics. All three chapters seek to answer or explore labor economics questions in the context of sports-related data.The first chapter addresses the substantial public debate regarding whether or not college athletes—specifically basketball and football players—should be compensated above the value of an athletic scholarship. In this paper, we estimate a panel data model with institution-level fixed effects and find that the annual value of a premium college basketball player at a major college program is approximately $380,000. These estimates are lower than those found in the previous literature, where yearly values often exceeded $1 million. Furthermore, we find that yearly changes in winning percentage have no effect on revenue at major programs which limits the ability of non-premium players to significantly contribute to team revenue. The second chapter examines strategic bargaining which is an important tool used in business and employment settings. Participants in a bargaining situation can use a variety of strategies to maximize contract value. In this paper, we analyze the effect of delaying contractual agreement (or holding out) on NFL rookie contract values. Using an instrumental variables approach, we find that a player who delays agreement and signs a contract after the start of his team’s training camp receives an increase in total contract value of nearly $120,000, on average. We also find that this effect is substantially larger for players who are selected in early rounds of the draft and sign larger contracts, increasing to an average effect of around $430,000 for first round draft picks.The third chapter studies the potential labor market impacts of sports teams and arenas. As professional sports continue to grow in popularity, the teams involved are competing for public funds in order to build the biggest and brightest stadiums and arenas. As this trend continues it is increasingly important to quantify the labor market impacts of sports teams and arenas to determine whether or not they are a sound public investment. This paperexpands on the current literature in two ways. First, by evaluating labor market effects at a narrower geographic level (by ZIP code), the data allow for a more precise examination of the potential for differing effects by proximity to the stadium/arena. Second, this paper deviates from the previous literature by estimating the impact of sports arenas that do not serve a major professional team, and instead focusing primarily on arenas that host minor league hockey teams in the AHL and ECHL. The results mirror the previous literature in that we fail to find any convincing evidence which supports the notion that construction of a new sports arena improves local labor market conditions.

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Economics Commons

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