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UMBC Economics
Department Working Paper Series
2004 Working Papers
- Working Paper 04-101:
"Baseball Strikes
and the Demand for Attendance" by Dennis Coates and Thane Harrison.
Abstract: Professional baseball has experienced numerous work-stoppages
over the last 30 years, including three which resulted in the cancellation of games.
Existing estimates of the demand for attendance at Major League Baseball games has
found that only those events which caused the loss of games influenced attendance.
This paper revisits the issue of whether strikes affect attendance and finds that
even those lockouts and strikes that do not cause games to be canceled are
associated with significantly lower attendance. Moreover, despite dramatic differences
in the severity of the three strikes that canceled games, one cannot reject
the hypothesis that the effects are the same. Finally, the evidence here suggests that
attendance is adversely affected by events leading up to negotiation of a new
Basic Agreement between the players and the owners.
- Working Paper 04-102:
"Legal Minimum Wages and the Wages of
Formal and Informal Sector Workers in Costa Rica" by T. H. Gindling and Katherine Terrell
Abstract: The classic dual economy models of developing countries hold minimum wages
(among other institutions) accountable for persistent dualism. They note that applying
or enforcing minimum wage laws in only one sector of the economy will create wage
differentials which will not be eroded with labor mobility to the high wage sector.
In this paper we use 12 years of micro data on thousands workers living in Costa Rica
to test whether legal minimum wages have a differential impact on the wages of workers
in the formal sector vs. informal sector, defined in various ways in accordance with the
dual development models. The evidence from Costa Rica is contrary to the assumptions of
these models. We find that increases in minimum wages not only raise the wages of workers
in the urban formal sector (large urban enterprises) who are covered by minimum wage law,
but they also increase the wages of all other workers covered by minimum wage legislation
in what are traditionally regarded as informal sectors and where the legislation is often
considered not to be enforced. Specifically, we provide evidence that minimum wages
increase the wages of workers in small urban enterprises, large rural enterprises and small
rural enterprises. Further, our results suggest that higher legal minimum wages raise the
average wage of workers in these "informal" sectors more than in the urban formal sector.
We concluded that in Costa Rica minimum wages are being enforced in the rural and small
scale sectors and may actually work to reduce average wage differentials between these
sectors and the urban formal sector. On the other hand, minimum wages have no significant
impact on the wages of workers in another sector that is regarded as informal but which
is not covered by minimum wage legislation: the self-employed workers (both urban and
rural). Thus, one could argue that minimum wages may contribute to dualism between the
formal and informal, defined as self-employed vs. salaried workers. However, we find no
evidence of the bleaker scenario, that self-employed earnings are being lowered by minimum
wages.
2003 Working Papers
- Working Paper 03-101:
"Novelty Effects
of New Facilities on Attendance at Professional Sporting Events" by Dennis
Coates and Brad R. Humphreys.
Abstract: We investigate the possibility that new facilities affect
attendance - the "novelty effect" - in professional baseball,
basketball, and football from 1969-2001 by estimating the
parameters of a reduced form attendance model. Our results
indicate a strong, persistent novelty effect in baseball and
basketball and little or no novelty effect in football. Our
estimates of size and duration of the novelty effect imply that,
in a new facility, at a minimum, a baseball team would sell an
additional 2,561,702 tickets over the first eight seasons, a
basketball team 446,936 over the first nine seasons, and a
football team 163,436 over the first five seasons. This increase
in attendance also suggests a corresponding increase in revenues
that could be tapped to help defray the large public subsidies
that state and local governments frequently provide to new stadium
and arena construction projects.
- Working Paper 03-102:
"The
Relationship Between Big-Time College Football and State Appropriations
to Higher Education" by Brad R. Humphreys.
Abstract: I investigate the relationship between big-time college football
programs and state appropriations to public institutions of higher
education. Estimation of a linear reduced form model of the
determination of state appropriations to higher education, using a
panel of financial, athletic, and state-specific economic data
from 570 public institutions of higher education at the
Baccalaureate level or higher from 1976-1996 shows that schools
with Division I-A football programs receive about 6% more in
state appropriations than schools that do not field a Division I-A
football team. Institutions with successful football teams
receive 3% to 8% increases in state appropriations the following
year. Defeating an in-state rival in a prominent football game is
also associated with an increased level of appropriation in the
following year. These results support the predictions of the
model of competition for political influence among pressure groups
developed by Becker (1983) and suggest that the total economic
benefit associated with big-time athletic programs may be larger
than previously thought.
- Working Paper 03-103:
"Professional
Sports Facilities, Franchises and Urban Economic Development" by Dennis
Coates and Brad R. Humphreys.
Abstract: Local political and community leaders and the owners of professional sports
teams frequently claim that professional sports facilities and franchises are
important engines of economic development in urban areas. These structures and
teams allegedly contribute millions of dollars of net new spending annually and
create hundreds of new jobs, and provide justification for hundreds of millions
of dollars of public subsidies for the construction of many new professional
sports facilities in the United Sates over the past decade. Despite these claims,
economists have found no evidence of positive economic impact of professional
sports teams and facilities on urban economies. We critically review the debate
on the economic effects of professional sports and their role as an engine of
urban economic redevelopment, with an emphasis on recent economic research.
- Working Paper 03-104:
"The
Effect of Professional Sports on the Earnings of Individuals:
Evidence from Microeconomic Data" by Dennis Coates and Brad R. Humphreys.
Abstract: This paper explores the impact of professional sports teams and
stadiums on the wages of individuals employed in several narrowly
defined occupational groups in cities in the United States. The
occupational groups examined are among those that proponents of
public funding of professional sports claim will benefit
economically from these stadiums. Our analysis uses data from the
March Supplement to the Current Population Survey (CPS) for the
period 1977 to 1998 as well as sports variables previously
utilized by Coates and Humphreys (1999), (2001).
Previous research focused on aggregate measures of income whereas
here the focus is on the wages of individual workers. The results
of the study confirm conclusions of earlier research that the
overall sports environment is frequently statistically significant
as a determinant of earnings and that the predicted mean impact of
sports on wages in a sample of individuals employed in occupations
closely related to professional sports is an annual average
decrease in real earnings of $47.95. The results also show that
the effects of the sports environment on wages differ across
job-types. Workers in retail occupations earn more on average each
year due to the presence of professional sports while workers in
other peripherally related occupations like food services and
hotels earn less.
- Working Paper 03-105:
"Voting
on Stadium and Arena Subsidies" by Dennis Coates and Brad R. Humphreys.
Abstract: We analyze voting on subsidies for professional
sports facilities in Harris County (Houston), Texas and Brown
County (Green Bay), Wisconsin to learn more about voter preferences
for these subsidies. The results differ somewhat between the two
jurisdictions, as do the nature of the supports being proposed and
the communities. One consistent result is that voting precincts
that have a relatively high degree of poverty tend to oppose
subsidies for professional sports. Another consistent result is
that voters in close proximity to existing facilities are more
likely to favor subsidies than are voters living farther from the
facilities. In Harris County, the results consistently indicate
that those over 65 years of age, whites, and those with Bachelors
degrees statistically significantly oppose subsidies while those
with higher incomes and blacks favor the subsidies. Different
values of consumption benefits, stemming from differences in
preferences, may explain these voting patterns.
- Working Paper 03-106:
"Agency
Behavior in a Nonprofit Setting: Effects of the 1984 Supreme Court
NCAA Decision " by Kathleen A. Carroll and Brad R. Humphreys.
Abstract: The NCAA is commonly viewed as a cartel. We model the cartel
relationship between the member teams and the NCAA central
organization as a principal-agent relationship. Our model
predicts imperfect agency behavior on the part of the NCAA with
corresponding overregulation relative to the level preferred by
the member teams. We empirically test the model by examining the
impact of the 1984 Supreme Court decision that reassigned the
telecast rights for intercollegiate football from the NCAA to the
individual member teams. Our empirical estimates of telecasts,
attendance, and competitive balance support the prediction of
imperfect agency behavior by the NCAA.
- Working Paper 03-107:
"Literacy and
Mobility in Rural versus Urban Victorian England: Evidence from linked
marriage register and census records for Birmingham and Norfolk, 1851
and 1881" by David Mitch.
Abstract: This paper reports procedures and results obtained from linking
marriage registers with the 1851 and 1881 censuses for Birmingham, a major industrial
center, and rural areas in Norfolk. The results underscore regional contrasts in mobility
processes. Those starting out in Birmingham from unskilled origins whether parental or
initial occupation, had quite high probabilities of experiencing upward occupational
mobility. Probabilities for those of unskilled origin were considerably lower in rural
Norfolk; but for those of higher origins mobility rates could at least equal if not exceed
those in Birmingham. More strikingly, literacy offered considerably greater prospects for
advancement for those in rural Norfolk than industrial Birmingham. Basic education
could matter more to the aspiring farm bailiff or rural shopkeeper than for the nail-maker
or gunsmith. The career impact of literacy over and above impact on initial occupation at
marriage was especially sizable for agricultural Norfolk in the earlier time period. The
results suggest differences in the migration patterns in the two areas with overall rates of
migration being higher in Norfolk, but migration rates for the upwardly occupationally
mobile being greater in Birmingham. There was no clear connection between literacy and
geographic mobility. Thus, the results here do indicate a positive association between
industrialization and occupational mobility. But they also underscore that mobility did
occur in agricultural areas and that education could play at least as great a role in
facilitating mobility in agricultural as in industrial areas.
- Working Paper 03-108:
"Accounting for Changing
Inequality in Costa Rica, 1980-1999" by T. H. Gindling.
Abstract: After declining from the mid-1970s to the mid-1980s, earnings
inequality in Costa Rica stabilized from 1987 to 1992 and then increased
from 1992 to 1999. In this paper we use recently-developed techniques to
measure the extent to which these changes in earnings inequality were the
result of changes associated with the distributions (or .quantities.) of
personal and work place characteristics of workers, and the earnings
differences (or .prices.) associated with those characteristics. We present
evidence that the most important cause of the fall in inequality prior to
1987 was a decline in returns to education, which in turn was caused by an
increase in the supply of more-educated workers. We find that the most
important causes of rising inequality in the 1990s were the end of this
decline in returns to education and increases in the variance of hours
worked among workers. Inequality in hours worked increased because of
an increase in the proportion of workers working a non-standard work
week (part-time or over-time)
- Working Paper 03-109:
"LA DESIGUALDAD
EN AMÉRICA CENTRAL DURANTE LOS AÑOS NOVENTA" by T. H. Gindling and Juan Diego Trejos.
Abstract: Este trabajo pretende examinar dos preguntas: ¿cómo y por qué cambió la distribución de los
ingresos en los países de América Central en los años noventa?, y, ¿por qué están los ingresos
distribuido en una manera más equitativa en Costa Rica en comparación a los otros países de la
región?. Para buscar respuestas a estas preguntas, se usa una técnica, basada en la estimación de
ecuaciones de remuneración, que mide la magnitud de la desigualdad debido a diferentes
características personales y del puesto de trabajo.
La dirección de los cambios en la desigualdad del ingreso en los países Centroamericanos en los
años noventa no es clara. Solamente Costa Rica presenta un deterioro claro en la distribución del
ingreso. En los otros países, los resultados dependen de la medida de la desigualdad y del
preceptor que se utilice. Pero bajo de estos cambios brutos, se encuentran fenómenos comunes
en todos los países en los mercados de trabajo. El aumento en la dispersión de las jornadas de
trabajo, es el fenómeno que se identifica con el mayor impacto negativo sobre equidad.
Se identifican dos causas importantes de los diferentes niveles de desigualdad entre Costa Rica y
el resto de los países de América Central. Primero, la educación está más igualitariamente
distribuida en Costa Rica que en el resto de la región. Segundo, las diferencias salariales entre las
zonas urbanas y rurales son más bajas en Costa Rica. Estos resultados implican que las políticas
Costarricenses de la universalización de la educación primaria y de proveer aún a las
comunidades rurales más aisladas de infraestructura económica y social son también causas
importantes de las diferencias n la desigualdad entre Costa Rica y el resto de Centroamérica.
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