The beautiful game? : an econometric study of audiences, gambling and efficiency in English football
Football is the world's most watched sport. This thesis investigates three related aspects of football in England using econometric techniques. An investigation of the reasons why people watch football, both live and televised matches is undertaken. Particular attention is paid to outcome uncertainty, both match and seasonal. Two equations are developed to explain match attendance and BSkyB television audiences for the 1993/94 English Premier League season. In the match attendance equation capacity constraints are accounted for by use of the Tobit model. It is found that quality factors, outcome uncertainty and supporter loyalty are all important determinants of football attendances but that televising a match on BSkyB does not significantly affect audiences. The second study focuses on the efficiency of the fixed odds betting market for football in England. It is the efficiency of how market participants utilise available information that is tested. A model of bookmaker behaviour is presented in which the bookmaker maximises their expected share of the total amount bet. It is found that an expected profit maximising bookmaker could set market inefficient odds. Several empirical tests using the ordered probit model with data on prices, publicly available information and experts' predictions are carried out. Evidence of market inefficiency is identified offering profitable betting opportunities. Productive efficiency of football clubs is the focus of the third study. It investigates how efficiently clubs utilise their inputs to produce playing success. Unlike most previous sports productive efficiency studies, true inputs (i.e. playing ability proxied by wages) and not intermediate outputs (e.g. goals scored) are used in the efficiency estimations. Two techniques, econometrics and Data Envelopment Analysis are used, allowing a useful comparison of their relative benefits. Efficient clubs are identified and the features which make them efficient discussed.