Why Do Economists Study Sports?

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?

  1. Sports provide unique opportunities to test economic theories.
  2. Sports shapes broader national debates.
  3. Professional sports are an important part of the economy.
  4. Sports participation is an important activity.
  5. Sports provides a useful teaching metaphor.
  6. 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.

2 Responses “Why Do Economists Study Sports?”

  1. Bryan says:

    JC:
    I think you missed an important one: sports have excellent data, both primary (given their inherently statistical nature) and secondary (given the amount of publicity/media attention they receive). The data collection challenges are much lower, giving an inquisitive economics researcher richer fields to plow.

  2. You forgot another motive to study the economic principles at work in sports: cheating.