mfosterftw
9/18/2008, 12:45 AM
Here is some more bye-week homework. This journal article is home grown.
Update: I've been reminded of the need of permissions before reprinting articles such as this. As such I'll limit the content to the conclusions and references.
NCAA Scholarship Limits and Competitive Balance in College Football
Journal of Sports Economics - February 2003
DANIEL SUTTER - University of Oklahoma
STEPHEN WINKLER - The Oklahoma Publishing Company
CONCLUSIONS
Conventional wisdom holds that parity is greater in college football today than ever before and that scholarship limits have fostered today’s competitive balance. A variety of measures indicate that the stylized fact is false; indeed, several measures indicate that college football has been less balanced since the imposition of scholarship limits. Regression analysis of time series measures indicates that the relationship between scholarship limits and parity is complicated. Scholarship limits seem to have reduced within-year parity while increasing parity as measured with the AP Top 20. Only 4 out of 16 scholarship-limit coefficients were significantly consistent with greater parity, so again the conventional wisdom is without support. The effect of scholarship limits suggests they serve to limit resources spent on football. An examination of the NCAA vote reducing the scholarship limit to 85 finds that recent success on the field made schools more likely to vote for the lower limit, but success over the entire postwar period did not affect voting. These results support the interpretations that the limits were to protect incumbent football powers or perhaps to protect rents generated by amateur status; the interpretation that weaker schools voted to level the playing field is rejected.
Our results raise the question, Why do scholarship limits not produce greater parity? Three explanations seem possible: (a) Scholarship limits have not been enforced or have been evaded, (b) the current limit of 85 scholarships is too high for limits to weaken strong programs, or (c) limits negatively impact both strong and weak programs, leaving competitive balance unchanged. The NCAA can easily measure the number of scholarships awarded, and athletes with scholarships for other sports cannot play football, so lack of enforcement of the current limit seems inadequate. Our research does not allow us to discriminate between the other two explanations. Future research on this question might focus on the relative impact of nonscholarship, walk-on players. If traditional powers attract more and better walk ons than also-rans, this would suggest that marginally lower scholarship limits will not increase parity and may even entrench incumbents.
REFERENCES
Barro, R. J. (1996). Getting it right: Markets and choices in a free society. Cambridge,MA:MIT Press.
Becker, G. S. (1987). The NCAA: A cartel in sheepskin clothing. Business Week, September 14, p. 24.
Bennett, R. W., & Fizel, J. (1995). Telecast deregulation and competitive balance: Regarding NCAA Division I football. American Journal of Economics and Sociology, 54(2), 183-199.
Borland, M. V., Goff, B. L., & Pulsinelli, R. W. (1992). College athletics: Financial burden or boon? Advances in the Economics of Sports, 1, 215-235.
Butler, M. R. (1995). Competitive balance in Major League Baseball. American Economist, 39(2), 46-50.
Byers, W. (with Hammer, C.). (1995). Unsportsmanlike conduct: Exploiting college athletes. Ann Arbor: University of Michigan Press.
Coase, R. (1960). The problem of social cost. Journal of Law and Economics, 3, 1-44.
Daly, G., & Moore,W. J. (1981). Externalities, property rights and the allocation of resources in Major League Baseball. Economic Inquiry, 19, 77-95.
DeBrock, L., & Hendricks,W. (1997). Setting rules in the NCAA cartel. Advances in the Economics of Sport, 2, 179-201.
Eckard, E. W. (1998). The NCAA cartel and competitive balance in college football. Review of Industrial Organization, 13, 347-369.
Fizel, J., & Bennett, R.W. (2001). College sports. InW. Adams&J. Brock (Eds.), The structure of American industry (10th ed., pp. 323-350). Upper Saddle River, NJ: Prentice Hall.
Fleisher, A. A., III, Goff, B. L., Shughart, W. F., & Tollison, R. D. (1988). Crime or punishment? Enforcement of the NCAA football cartel. Journal of Economic Behavior and Organization, 10, 433-451.
Fleisher, A. A., III, Goff, B. L., & Tollison, R. D. (1990).NCAAvoting on academic requirements: Public or private interest? In B. L. Goff & R. D. Tollison (Eds.), Sportometrics (pp. 173-178). College Station: Texas A&M University Press.
Fleisher, A. A., III, Goff, B. L., & Tollison, R. D. (1992). The National Collegiate Athletic Association. Chicago: University of Chicago Press.
Frank, R. H., & Cook, P. J. (1995). The winner-take-all society. New York: Penguin Books.
Hylan, T. R., Lage, M. J., & Treglia, M. (1996). The Coase theorem, free agency, and Major League Baseball: A panel study of pitcher mobility from 1961 to 1992. Southern Economic Journal, 62(4), 1029-1042.
McCormick, R. E., & Tinsley, M. (1987). Academics versus athletics? Evidence from SAT scores. Journal of Political Economy, 95(5), 1103-1116.
McCormick, R. E., & Tinsley, M. (1990). Athletics and academics:Amodel of university contributions. In B. L. Goff & R. D. Tollison (Eds.), Sportometrics (pp. 193-204). College Station: Texas A&M University Press.
Olson, M. (1965). The logic of collective action. Cambridge, MA: Harvard University Press.
Scully, G. (1989). The business of Major League Baseball. Chicago: University of Chicago Press.
Stassen, C. (2001). College football information. Available from http://www.stassen.com
Stigler, G. S. (1975). The citizen and the state: Essays on regulation. Chicago: University of Chicago Press.
Daniel Sutter earned his Ph.D. from George Mason University and is currently associate professor of economics at the University of Oklahoma. His research interests include sports economics, constitutional economics, the urban land assembly problem, the economics of the news media, and the economic impact of weather and natural hazards.
Stephen Winkler holds an MBA in finance from the University of Oklahoma. He is currently a financial analyst with the Oklahoma Publishing Company.
Update: I've been reminded of the need of permissions before reprinting articles such as this. As such I'll limit the content to the conclusions and references.
NCAA Scholarship Limits and Competitive Balance in College Football
Journal of Sports Economics - February 2003
DANIEL SUTTER - University of Oklahoma
STEPHEN WINKLER - The Oklahoma Publishing Company
CONCLUSIONS
Conventional wisdom holds that parity is greater in college football today than ever before and that scholarship limits have fostered today’s competitive balance. A variety of measures indicate that the stylized fact is false; indeed, several measures indicate that college football has been less balanced since the imposition of scholarship limits. Regression analysis of time series measures indicates that the relationship between scholarship limits and parity is complicated. Scholarship limits seem to have reduced within-year parity while increasing parity as measured with the AP Top 20. Only 4 out of 16 scholarship-limit coefficients were significantly consistent with greater parity, so again the conventional wisdom is without support. The effect of scholarship limits suggests they serve to limit resources spent on football. An examination of the NCAA vote reducing the scholarship limit to 85 finds that recent success on the field made schools more likely to vote for the lower limit, but success over the entire postwar period did not affect voting. These results support the interpretations that the limits were to protect incumbent football powers or perhaps to protect rents generated by amateur status; the interpretation that weaker schools voted to level the playing field is rejected.
Our results raise the question, Why do scholarship limits not produce greater parity? Three explanations seem possible: (a) Scholarship limits have not been enforced or have been evaded, (b) the current limit of 85 scholarships is too high for limits to weaken strong programs, or (c) limits negatively impact both strong and weak programs, leaving competitive balance unchanged. The NCAA can easily measure the number of scholarships awarded, and athletes with scholarships for other sports cannot play football, so lack of enforcement of the current limit seems inadequate. Our research does not allow us to discriminate between the other two explanations. Future research on this question might focus on the relative impact of nonscholarship, walk-on players. If traditional powers attract more and better walk ons than also-rans, this would suggest that marginally lower scholarship limits will not increase parity and may even entrench incumbents.
REFERENCES
Barro, R. J. (1996). Getting it right: Markets and choices in a free society. Cambridge,MA:MIT Press.
Becker, G. S. (1987). The NCAA: A cartel in sheepskin clothing. Business Week, September 14, p. 24.
Bennett, R. W., & Fizel, J. (1995). Telecast deregulation and competitive balance: Regarding NCAA Division I football. American Journal of Economics and Sociology, 54(2), 183-199.
Borland, M. V., Goff, B. L., & Pulsinelli, R. W. (1992). College athletics: Financial burden or boon? Advances in the Economics of Sports, 1, 215-235.
Butler, M. R. (1995). Competitive balance in Major League Baseball. American Economist, 39(2), 46-50.
Byers, W. (with Hammer, C.). (1995). Unsportsmanlike conduct: Exploiting college athletes. Ann Arbor: University of Michigan Press.
Coase, R. (1960). The problem of social cost. Journal of Law and Economics, 3, 1-44.
Daly, G., & Moore,W. J. (1981). Externalities, property rights and the allocation of resources in Major League Baseball. Economic Inquiry, 19, 77-95.
DeBrock, L., & Hendricks,W. (1997). Setting rules in the NCAA cartel. Advances in the Economics of Sport, 2, 179-201.
Eckard, E. W. (1998). The NCAA cartel and competitive balance in college football. Review of Industrial Organization, 13, 347-369.
Fizel, J., & Bennett, R.W. (2001). College sports. InW. Adams&J. Brock (Eds.), The structure of American industry (10th ed., pp. 323-350). Upper Saddle River, NJ: Prentice Hall.
Fleisher, A. A., III, Goff, B. L., Shughart, W. F., & Tollison, R. D. (1988). Crime or punishment? Enforcement of the NCAA football cartel. Journal of Economic Behavior and Organization, 10, 433-451.
Fleisher, A. A., III, Goff, B. L., & Tollison, R. D. (1990).NCAAvoting on academic requirements: Public or private interest? In B. L. Goff & R. D. Tollison (Eds.), Sportometrics (pp. 173-178). College Station: Texas A&M University Press.
Fleisher, A. A., III, Goff, B. L., & Tollison, R. D. (1992). The National Collegiate Athletic Association. Chicago: University of Chicago Press.
Frank, R. H., & Cook, P. J. (1995). The winner-take-all society. New York: Penguin Books.
Hylan, T. R., Lage, M. J., & Treglia, M. (1996). The Coase theorem, free agency, and Major League Baseball: A panel study of pitcher mobility from 1961 to 1992. Southern Economic Journal, 62(4), 1029-1042.
McCormick, R. E., & Tinsley, M. (1987). Academics versus athletics? Evidence from SAT scores. Journal of Political Economy, 95(5), 1103-1116.
McCormick, R. E., & Tinsley, M. (1990). Athletics and academics:Amodel of university contributions. In B. L. Goff & R. D. Tollison (Eds.), Sportometrics (pp. 193-204). College Station: Texas A&M University Press.
Olson, M. (1965). The logic of collective action. Cambridge, MA: Harvard University Press.
Scully, G. (1989). The business of Major League Baseball. Chicago: University of Chicago Press.
Stassen, C. (2001). College football information. Available from http://www.stassen.com
Stigler, G. S. (1975). The citizen and the state: Essays on regulation. Chicago: University of Chicago Press.
Daniel Sutter earned his Ph.D. from George Mason University and is currently associate professor of economics at the University of Oklahoma. His research interests include sports economics, constitutional economics, the urban land assembly problem, the economics of the news media, and the economic impact of weather and natural hazards.
Stephen Winkler holds an MBA in finance from the University of Oklahoma. He is currently a financial analyst with the Oklahoma Publishing Company.