If you haven’t been following Marginal Revolution this week, Justin Wolfers is guest blogging there and seems to be a natural. Let’s hope he decides to blog full time.
Wolfers has used sports as a laboratory for several studies (point-shaving and racial bias) and yesterday he asked, “why is it that economists study sports?”
- Sports provide unique opportunities to test economic theories.
- Sports shapes broader national debates.
- Professional sports are an important part of the economy.
- Sports participation is an important activity.
- Sports provides a useful teaching metaphor.
- Doing research on sports is fun.
I agree with all of these, but I think he is missing one. Sports markets are themselves unique and interesting. For example, Simon Rottenberg’s curiosity about baseball’s reserve clause—how it affected the allocation of talent across a league—led him to discover (nearly) the Coase Theorem before Ronald Coase. Mohamed El-Hodiri and James Quirk were the first model the unique structure economic structure of sports leagues, which I think economists still do not fully understand. (There are other examples, but I am on my way to a meeting.)
Economists like to study interesting puzzles; because there are many unanswered questions in sports, and many economists follow sports, you are going to see a lot of study in this area.
Posted by JC in Economics, General