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Saturday, May 14, 2005

Another approach

Lagged winning percentage was used previously as an indicator of quality. Team owners are likely to increase ticket prices when they (rationally?) anticipate an increase in attendance in the current season. Here are plots of predicted odds of increasing prices against the previous year's attendance and current year's attendance. In both cases the dummy variable on SALUP is insignificant.

The scatter using lagged attendance as an explanatory variable seems a little tighter, but that's using the eye-ball metric.

Is current attendance endogenous to the decision to increase ticket prices? Most likely. When instrumenting for current season attendance with previous season's winning percentage, current year unemploymnent and whether the team plays in a new stadium (five years old or younger) the qualitative results don't change:
rtixup | Coef. Std. Err. z P>|z| [95% Conf. Interval]
salup | -.2303579 .2021408 -1.14 0.254 -.6265465 .1658308
pop | -.009885 .0158019 -0.63 0.532 -.0408561 .0210861
rincome | .068857 .0270583 2.54 0.011 .0158237 .1218902
attend | 5.39e-07 2.53e-07 2.13 0.033 4.27e-08 1.03e-06
_cons | -3.043531 .9182635 -3.31 0.001 -4.843295 -1.243768

More evidence that salaries increasing are not the cause of ticket prices increasing.

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