Sport Economics,
Reading 01 (Book)
Recommended Readings
Sports Economics
Theory, Evidence and Policy
https://drive.google.com/?tab=wo&authuser=0#my-drive
HANDBOOK ON THE ECONOMICS OF SPORT
https://drive.google.com/?tab=wo&authuser=0#my-drive
Lecture on 14.03.2014
Sport and Economics
https://docs.google.com/file/d/0B9t00U95ZJNRZEFrempKVHdvazg/edit
Lesson on 18.06.2013
http://www.humankinetics.com/excerpts/excerpts/definitions-of-leisure-play-and-recreation
Lesson on 26.03.2014
thttps://docs.google.com/file/d/0B9t00U95ZJNRVWRVM0psOWNUQ3M/edit
MCQ on Demand 01
https://docs.google.com/file/d/0B9t00U95ZJNROS05b1lIb2RfcEk/edit
MCQ on Demand and Revenue
https://docs.google.com/file/d/0B9t00U95ZJNRdXAyQi1WVm5OMVk/edit
Economic Rational for Voluntary Sector
Weisbrod (1978, 1988) provided an economic rationale
for the existence of the voluntary sector
There is a need for
this sector since government fails to correct for all private market failures—see
Chapter
6. In other words, a combination of commercial market failure and government failure
leaves opportunities for
a third major provider, the non-profit
supplier.
Weisbrod argued that two
factors are particularly relevant to the stimulation of voluntary sector
activity
Government
itself lacks adequate information on
consumer
demands, and also government
officials often follow their own personal objectives rather
than acting on the basis of abstract concepts of efficiency and equity.
Government may be an efficient provider of collective goods if demand for such goods is homogeneous. In circumstances where there are diverse demands, the voluntary sector is likely to be the more efficient provider
Government
fails to obtain relevant information on consumer demand when demand is
heterogeneous and
fragmented, even when the nature of the good concerned is collective.
There
are several reasons for this.
First,
there is a motivation problem.
Second,
there is an information problem.
Lesson on 13.06.2013
Production cost
Opportunity cost
Economic Profit and Accounting Profit
Lesson on 11.06.2013
The voluntary sector and sport
•In lot of countries a large proportion of sporting opportunities are provided by out side the government and commercial sector.
Most sports in the country are organised around voluntary clubs.
The lesson begins, therefore, with a description of the size, structure and value of the voluntary sector. It then explores the economic rationale for the voluntary sector.
The structure and scale of voluntary sport
Many sports have separate schools associations; several have separate disabled/ wheelchair associations—indeed, disabled sport has a whole structure of its own governing bodies.
In the General Household Survey three of the largest sporting activities are walking
(over two miles, for recreational purposes), indoor swimming, and keep fit. these three major sport activities are provided by out side of club and governing body.
voluntary sector in sport is very diverse.
Basically there are two type of voluntary
01 Formal Voluntary
working in club or governing body
02 In formal Voluntary
Parents who drive their children to sport, friend who help to team. friends who coach or train sports participants outside the formal organisation of a club.
Individual sports
There is not a strong relationship between the size of volunteering and the size of participation in a sport. Some of the most popular sports are not among the most significant for volunteering, e.g. cycling, walking and swimming, because a lot of participation in these sports is informal, casual, un competitive and therefore
not in need of volunteer support.
Other relatively minority sports have a very high percentage of participants in organisations which rely on volunteers, such as cricket, rugby and hockey; they are high in the ranking of sports according to voluntary activity because they are largely played in a formal club environment and need a full range of volunteer support, including administration of competitions, coaching and grounds maintenance.
Some time another type of sport has The voluntary sector and sport 129
a high percentage of participants in clubs but does not need as much volunteer support because it has significant commercial provision, e.g. sailing.
Major international events
world cup of cricket, Olympic, European championship
Disabled sport
British Amputees Sports Association, British Blind Sport, British Deaf Sports Council, British Les Autres Sports Association, British Paralympic Association, British Wheelchair Sports Foundation, National Federation of Gateway Clubs, Riding for the Disabled Association, and Special Olympics GB
Schools
Assessing volunteer activity for sport in schools is complicated by the fact that a lot of teachers work extra time for no extra pay in order to supervise extracurricular sport in schools.
Youth organisations
Air Training Corps, Army Cadets, Boys Brigade, Boys Cubs, Combined Cadets, Girls Brigade, Guides,
Methodist Youth Clubs, Scouts, Sea Cadets, YMCA, Young Farmers, Youth Clubs UK (the Duke of Edinburgh’s Award Scheme is conducted largely through other organisations, so few volunteers are specific to it).
The value of volunteering
Nevertheless, from the point of view of the organisation rather than the individual volunteer, the value of voluntary labour is relevant because without this voluntary labour the main alternative is a paid replacement
In principle the value of voluntary labour can be approached in much the same way as valuing leisure time.
Three methods are possible.
First,
Direct questions as part of a contingent valuation approach could attempt to identify what value volunteers would ascribe to losing an opportunity to do voluntary work. No studies of this type have been conducted to value voluntary labour.
Second, the hedonic pricing method would analyse the behavior of economic agents whose prices reflected the value of voluntary labour. However, identification of such agents in this case is difficult, and again no such investigation has been conducted.
The third method, the opportunity cost method, works on the premise that the alternative to doing voluntary work is to do paid work, and the rate at which
paid work could be obtained is the opportunity cost or shadow wage of preferring voluntary labour.
A major problem in valuing the volunteer market in sport is that no accepted shadow wage rate is used.
Economic rationale for the voluntary sector
http://www.keepfit.org.uk/
Lesson on 13.05.2013 The lesson begins, therefore, with a description of the size, structure and value of the voluntary sector. It then explores the economic rationale for the voluntary sector.
The structure and scale of voluntary sport
Many sports have separate schools associations; several have separate disabled/ wheelchair associations—indeed, disabled sport has a whole structure of its own governing bodies.
In the General Household Survey three of the largest sporting activities are walking
(over two miles, for recreational purposes), indoor swimming, and keep fit. these three major sport activities are provided by out side of club and governing body.
voluntary sector in sport is very diverse.
Basically there are two type of voluntary
01 Formal Voluntary
working in club or governing body
02 In formal Voluntary
Parents who drive their children to sport, friend who help to team. friends who coach or train sports participants outside the formal organisation of a club.
Individual sports
There is not a strong relationship between the size of volunteering and the size of participation in a sport. Some of the most popular sports are not among the most significant for volunteering, e.g. cycling, walking and swimming, because a lot of participation in these sports is informal, casual, un competitive and therefore
not in need of volunteer support.
Other relatively minority sports have a very high percentage of participants in organisations which rely on volunteers, such as cricket, rugby and hockey; they are high in the ranking of sports according to voluntary activity because they are largely played in a formal club environment and need a full range of volunteer support, including administration of competitions, coaching and grounds maintenance.
Some time another type of sport has The voluntary sector and sport 129
a high percentage of participants in clubs but does not need as much volunteer support because it has significant commercial provision, e.g. sailing.
Major international events
world cup of cricket, Olympic, European championship
Disabled sport
British Amputees Sports Association, British Blind Sport, British Deaf Sports Council, British Les Autres Sports Association, British Paralympic Association, British Wheelchair Sports Foundation, National Federation of Gateway Clubs, Riding for the Disabled Association, and Special Olympics GB
Schools
Assessing volunteer activity for sport in schools is complicated by the fact that a lot of teachers work extra time for no extra pay in order to supervise extracurricular sport in schools.
Youth organisations
Air Training Corps, Army Cadets, Boys Brigade, Boys Cubs, Combined Cadets, Girls Brigade, Guides,
Methodist Youth Clubs, Scouts, Sea Cadets, YMCA, Young Farmers, Youth Clubs UK (the Duke of Edinburgh’s Award Scheme is conducted largely through other organisations, so few volunteers are specific to it).
The value of volunteering
Nevertheless, from the point of view of the organisation rather than the individual volunteer, the value of voluntary labour is relevant because without this voluntary labour the main alternative is a paid replacement
In principle the value of voluntary labour can be approached in much the same way as valuing leisure time.
Three methods are possible.
First,
Direct questions as part of a contingent valuation approach could attempt to identify what value volunteers would ascribe to losing an opportunity to do voluntary work. No studies of this type have been conducted to value voluntary labour.
Second, the hedonic pricing method would analyse the behavior of economic agents whose prices reflected the value of voluntary labour. However, identification of such agents in this case is difficult, and again no such investigation has been conducted.
The third method, the opportunity cost method, works on the premise that the alternative to doing voluntary work is to do paid work, and the rate at which
paid work could be obtained is the opportunity cost or shadow wage of preferring voluntary labour.
A major problem in valuing the volunteer market in sport is that no accepted shadow wage rate is used.
Economic rationale for the voluntary sector
http://www.keepfit.org.uk/
The Market for Sports Broadcast Rights
•The
functions of ads and the market for sports broadcast rights.
•The
complicated nature of the value of ads to advertisers.
•The
“big picture” look at the value of sports programming to media providers.
•The
size of media revenues and their variation in a given league and across
leagues.
The
role of commercialization in pro sportsRelated link
Economics of Sport and Recration (A book in PDF)
http://qiu.ir/Files/110/Document/General/1391/7/26/3112b78c69c342429eef2a1e3ac77daa.pdf
Producer’s surplus and managerial
decision
What is Producers' Surplus
Calculation of Producers' Surplus
Implication of Producers' Surplus in to Sport and Recreation Field
Lesson on 23.04.2013
Demand and Elasticity of Demand
•Demand Curve, Schedule and Equation
• Elasticity, as a concept in Sport
Various Measures of Elasticity
Various Measures of Elasticity
Price Elasticity of Demand
Income Elasticity of Demand
Cross Elasticity of Demnad
Lesson on 18.04.2013
Demand and Total Revenue
•Demand(as
principle), its variation across sports and market power.
•Demand
and sports fan “welfare.”
•Demand,
elasticity, total revenue and marginal revenue in sports.
•Price
discrimination.
•Revenue
variation and competitive imbalance in sports.
http://thesportseconomist.com/labels/Elasticity%20of%20demand.htm
http://jse.sagepub.com/
http://jse.sagepub.com/content/5/2/206.abstract
http://books.google.lk/books?id=YOdORNAto6QC&pg=PA69&lpg=PA69&dq=demand+theory++in+sport&source=bl&ots=cb9TFjRgSZ&sig=T3zK5qAx7xaU6RDn_mculNyM5HI&hl=en&sa=X&ei=V99uUcrMGorTrQfyzIDQCw&ved=0CD0Q6AEwAg#v=onepage&q=demand%20theory%20%20in%20sport&f=false
Lesson on 04.04.2013
Overview
•There
is more to sports than their revenues.
•Standard
economic tools can enhance understanding.
•Some
befuddling things for fans.
•Skepticism
over owner poverty claims.
•The
owners’ points of view.
Big Business Sports
•TSN 100- only 10% of the most powerful
people in sports are players.
•Teams
that spend the most tend to win the most– Why?
•Owner
behavior:
Stadium subsidy demands.
Admission prices.
TV rights.
Player negotiations.
A Little Perspective?
•Economist Henry Aaron, Congressional
Testimony on C-SPAN, 1994:
•MLB is a $6+ billion industry.
•NFL closer to $7 billion.
•This puts them in glamorous company:
• U.S.
cardboard boxes: $8 billion.
But Remember…
•There is no cardboard box section in the
newspaper every day!
•Measuring actual economic activity will
not capture everything about the values and costs of sports.
Approach: Economics
•Demand- The
source of revenue.
•Costs- The
decisions behind supply.
•Market
Outcomes- Especially when firms have market power.
•The
Input Market-
Player pay and labor relations.
•Business
and Government-
Subsidies, tax treatment, and antitrust.
Group Assignment
on 11th Aprial 2013
“Demand
and its Basic Elements”
Each group has 30 minute to present their work and number of
presenters should depend of group’s need. Bothe Sinhala and English medium are
accepted to present.
Group 01
Student Number
|
Name
|
Marks
|
SS/2010/273
|
G.A.I. Madushani
|
|
SS/2010/060
|
P.H.D. Chandrathilak
|
|
SS/2010/261
|
K.N. Lakmali
|
|
SS/2010/102
|
D.M.A.I. Dissanayake
|
|
SS/2010/223
|
K.A.A.D. Kathriarachchi
|
|
SS/2010/545
|
D.T. Wijenayaka
|
|
SS/2010/144
|
M.M.N.S. Gunathilaka
|
|
SS/2010/225
|
N.W.A.B. Kularathna
|
|
SS/2010/196
|
S.A.P.N. Jayasiri
|
Group 02
Student Number
|
Name
|
Marks
|
SS/2010/368
|
W.M.H.M.H.D. Pohohyadde
|
|
SS/2010/390
|
M.I. Puspakumara
|
|
SS/2010/163
|
H.A.S. Saranga
|
|
SS/2010/072
|
D.D. Darshani
|
|
SS/2010/191
|
K.J.M.D.K. Jayasekara
|
|
SS/2010/336
|
P.M.S. Pathirja
|
|
SS/2010/231
|
Dulanja Ruwan
|
|
SS/2010/440
|
A.A.D.Sandamali
|
|
SS/2010/306
|
Shasikala Mudunkotuwa
|
|
SS/2010/192
|
D.P.R Jayasinghe
|
|
SS/2010/377
|
K.D.N. Priyadarshana
|
|
SS/2010/529
|
W.G.D.S. Wehigaldeniya
|
Group 03
Student Number
|
Name
|
Marks
|
SS/2010/220
|
U.D.P.T. Karunathne
|
|
SS/2010/539
|
W.A.T.P. Wickramasinghe
|
|
SS/2010/338
|
P.A. Pathirana
|
|
SS/2010/024
|
B.G.P.C. Ariyathilak
|
|
SS/2010/014
|
I.M. Aluthge
|
|
SS/2010/050
|
I.S. Maduwanthi
|
|
SS/2010/219
|
R.R.N. Karunarathna
|
|
SS/2010/546
|
W.M.L.K. Wijenayake
|
|
SS/2010/277
|
W.M. Madushanka
|
|
SS/2010/038
|
K.A.W Priyankara
|
Consumer Surplus and Managerial decisions in Sport Organization
Consumer surplus measures the welfare that consumers derive from their consumption of goods and services, or the benefits they derive from the exchange of goods.
Consumer surplus is the difference between what consumers are willing to pay for a good or service (indicated by the position of the demand curve) and what they actually pay (the market price).
The level of consumer surplus is shown by the area under the demand curve and above the ruling market price
Consider the demand for seat in Sugathadasa Stadium shown in the diagram.
Total benefit is A+B and cost for the consumption for the amount of Q1 is B so consumer surplus is A
Consumer surplus = total willingness to pay for a good or service( total benefit which is limited to amount of consumption) - the total amount consumers actually do pay.
If a zero fare is charged, consumers will demand bus journeys up to the point where the demand curve cuts the x-axis.
When demand for a product is perfectly elastic, the level of consumer surplus is zero since the price that people pay matches precisely the price they are willing to pay. There must be perfect substitutes in the market for this to be the case.
When demand is perfectly inelastic the amount of consumer surplus is infinite. Demand is invariant to a price change. Whatever the price, the quantity demanded remains the same.
Note that both these situations are highly unlikely to exist - the vast majority of demand curves for goods and services are downward sloping. When demand is inelastic, there is a greater potential consumer surplus because there are some buyers willing to pay a high price to continue consuming the product.
Sport and Economics
If the consumer surplus is getting than they hope they enter the market.so quantity of demand will increase.so managers have to take decision for face the market.
ReplyDeleteIf consumers get profit than they hope,consumer enter the market non competition.so producers have to increase their product.they can develop their revenue by increasing the price & quantity of supply.Managers will have to take decision withing short period.so they should be alert about the consumer surplus.
ReplyDelete