Uncertainty of outcome or strengths of teams: an economic analysis of attendance demand for international cricket

Abstract

A significant body of theoretical literature has argued that popular interest in sporting contests between teams is heavily influenced by how difficult it is to predict the result ex-ante. Empirical research has, however, been unable to reach a consensus on magnitude of uncertainty on demand. In this paper, we seek to resolve this impasse by distinguishing between uncertainty of outcome in the short run and uncertainty of outcome in the long run. We also show that it is important to control for the independent effect of absolute team strength when testing the uncertainty of outcome hypothesis. Using data on over 380 Test cricket matches played in England, Australia and New Zealand since 1980, we find that short run uncertainty of outcome has a significant impact on attendance demand and that absolute team strength has better explanatory power for attendance demand than does long run uncertainty of outcome.Our results suggest some policy implications for the management and organisation of international cricket.

An Economic Analysis of Attendance Demand for One Day International Cricket

“…In contrast to Sacheti et al . 's () result for Test matches in Australia, the strength of opposition teams is seemingly not as important in affecting ODI demand in Australia. In England, day/night games do not significantly raise attendance.…”

“…There is some evidence that long‐run uncertainty of outcome has an impact on demand for ODI cricket: in the main, this evidence is from ODIs in England, where long‐run uncertainty of outcome is found to raise attendance. This contrasts with recent evidence on demand for Test cricket (Sacheti et al ., ) which shows that long‐run uncertainty has a negligible impact on demand, with the strength of both home and away teams being overwhelmingly more important in both England and Australia.…”

“…Similarly to Hynds and Smith (), Bhattacharya and Smyth () and Sacheti et al . (), we capture short‐run uncertainty of outcome by including a dummy variable for series uncertainty of outcome ( Series Certainty ). This equals 1 if the series result was decided prior to the match or, in a multi‐nation tournament, if the identity of the finalists had been decided before the match.…”

“…Sacheti et al . () add to this literature by incorporating an additional measure which captures the uncertainty of outcome over a longer period of time (which they call long‐run uncertainty of outcome). The finding there shows that placing relative qualities of the two teams in a historical context is very important when explaining the demand for Test cricket.…”

“…In particular, Sacheti et al . () note that in both England and Australia, the absolute strengths of the home and away teams increase demand, whereas the relative long‐term strengths of teams have little effect.…”