COMPETITIVE BALANCE MEASURES IN SPORTS LEAGUES: THE EFFECTS OF VARIATION IN SEASON LENGTH |
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| Authors: | P. Dorian Owen Nicholas King |
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| Affiliation: | 1. 64 3 479 8655;2. Department of Economics, University of Otago, Dunedin 9054, New Zealand;3. Department of Economics, University of Otago, Dunedin 9054, New ZealandWe are grateful to the co‐editor, Jeff Borland, and an anonymous referee for their very helpful and constructive suggestions. Earlier versions of this article were presented at the New Zealand Association of Economists Conference, Palmerston North (June 2012), the New Zealand Econometric Study Group Meeting, Auckland (February 2013), and in seminars at the University of Otago (June 2012) and Massey University, Albany (September 2013). We are grateful to participants, especially Geneviève Gauthier, Seamus Hogan, and Taesuk Lee, for their helpful comments. We also thank Caitlin Owen for excellent research assistance and acknowledge financial support from a University of Otago Research Grant. The authors declare that they have no relevant or material financial interests that relate to the research described in this article. |
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| Abstract: | Appropriate measurement of competitive balance is central to the economic analysis of professional sports leagues. We examine the distributional properties of the ratio of standard deviations (RSD) of points percentages, the most widely used measure of competitive balance in the sports economics literature, in comparison with other standard‐deviation‐based measures. Simulation methods are used to evaluate the effects of changes in season length on the distributions of competitive balance measures for different distributions of the strengths of teams in a league. The popular RSD measure performs as expected only in cases of perfect balance; if there is imbalance in team strengths, its distribution is sensitive to changes in season length. It is therefore not recommended for comparisons of competitive balance for different sports leagues with different numbers of teams and/or games played. (JEL L83, D63, C63) |
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