Extract

In this chapter, we offer policy observations based on the impact of competitive balance and the behavior of structural break points in Major League Baseball’s (MLB’s) attendance time series. First, game uncertainty and dynasties (that is, winning consecutive championships) do not matter for attendance but playoff uncertainty does. However, the impact of playoff uncertainty is economically unimportant. Second, structural breaks occur proximate only to post-World War II racial integration, expansion in the early 1960s, expansion and the introduction of division play in 1969, and for the commonly acknowledged hitting power escalation of the late 1980s. No structural breaks coincide with other expansion episodes or the explosion of cable television in the 1980s. Past work on attendance time series in MLB have focused on the impact of strikes (Schmidt and Berri, 2002, 2004), econometric time series issues (Fort and Lee, 2006) and the role of outcome uncertainty (Lee and Fort, 2008). None of these are explicitly aimed at extracting policy lessons as we do in this chapter for each of the episodes just identified.