UNIVERSITY OF WISCONSIN - LA CROSSE
ECO 320 Economics of Sports   

T&TH 7:45-9:10 

Room: CWH 114

Fall 2011

 

Donna M. Anderson, Ph.D.

Professor - Department of Economics

Phone: (608) 785-6864                   Email: danderson3@uwlax.edu

http://www.uwlax.edu/faculty/anderson

Office: 339D Wimberly Hall

Office Hours:  Mondays & Wednesdays Noon-2:00; And by appointment

I. COURSE OBJECTIVES

In this course we will use the tools of microeconomic analysis to explore the sports industry.  Economic theories from public finance, industrial organization, labor economics, and as well as legal and philosophical theories on justice will be used to help us better understand outcomes in professional and amateur sports. The objectives of the course are to develop your  ability to do the following:

 

1.    Apply the concepts of opportunity cost and comparative advantage to team composition.

2.    Apply the neoclassical economic model of supply and demand (and the related concepts of elasticity and price controls) to various markets, including sports memorabilia and tickets to sporting events.  Identify consequences, such as ticket scalping, and the winners and losers from various policies designed to "improve" pricing and output outcomes. Analyze the equity and efficiency effects of the secondary market for tickets by organizations like StubHub.

3.    Explain the behavior of sports leagues and individual teams as profit-maximizing entities within the context of a monopoly market structure. Compare ownership models of franchises vs. single entities from an economic perspective. Analyze the effect of revenue-sharing, salary caps, gate revenue, television rights and promotions on various outcomes, including competitive balance. 

4.    Apply public sector economics theories to the private/public financing of stadiums and sports teams. Evaluate economic impact arguments of sports franchises.

5.    Understand the labor market for sports professionals within the economic models of a perfectly competitive labor market vs. a monopsony. Analyze the effectiveness of policies that inhibit and promote more competition in this labor market, including free-agency.

6.    Apply various theories of labor economics to explain the reasons for salary differences between players within the same sport and between sports.

7.    Apply game theory to better understand athletes' incentive to cheat within a sport, including the use of performance-enhancing drugs.

8.    Apply game theory to the  NCAA to explain certain outcomes, including why it is a cartel and the incentive by a university or athletic program to cheat.   Analyze from an economic perspective recent proposed policies designed to crack-down on cheating in the NCAA.

9.    Understand the role of race, ethnicity and gender in explaining salary differences. Apply theories of labor market discrimination to the market for sports professionals.

10.    Apply theories of pre-labor market discrimination to explain sports outcomes and explain the rationale for Title IX of the 1972 Educational Amendment.

11.    Apply the theory of unions to professional sports.

12.    Understand regression analysis and how to apply it to better understand labor market outcomes within sports.

13.    Conduct economic research.

 

Please note that this course’s learning objectives align with the College of Business Administration’s learning outcomes for the undergraduate degree programs:

·         Communication - the ability to convey information and ideas effectively

·         Decision Making and Critical Thinking – the ability to evaluate alternatives and understand the ramifications of those alternatives within a given business context

·         Global Context of Business – the ability to integrate global perspectives in business decisions

·         Major Competency - proficiency in the primary functional area of study

·         Social Responsibility - the ability to consider the effects of business decisions on the entire social system

The full statement of undergraduate learning outcomes can be found at: http://www.uwlax.edu/ba/undergrad/uccgoals.htm

 

Throughout the semester you will be expected to demonstrate your progress in meeting the learning objectives through a wide variety of activities, including classroom assignments, homework assignments, quizzes, a final exam, written reports, and class discussions and presentations. You are encouraged to discuss course work and assignments with classmates and with me. However, each student must produce and submit his/her own individual work for each assignment.  

II. REQUIRED READINGS (available from Textbook Rental)

Michael Leeds and Peter von Allmen, The Economics of Sports.  Prentice Hall, 4th ed.

Other readings announced in class and posted on the Eco 320 Readings and Assignments page.

III.    WRITING EMPHASIS COMPONENT

This is a writing emphasis course.  This means that you do a considerable amount of writing as a primary means of achieving the course objectives.  That is, writing is an important way to learn, think and communicate.  Throughout the course, you are asked to do two different types of writing:  informal writing and formal writing.  In general, informal writing is used to help you think and learn about the economics of sports, i.e., learn through writing.  You are the primary audience.  Following the learning process, formal writing is used to communicate your knowledge to others.  It, too, is intended to enhance your learning and thinking, but also is intended to enhance your ability to communicate your ideas clearly and coherently.  To this end, please keep the following in mind.

Once I was asked by a seatmate on a trans-Pacific flight, a man who took the liberty of glancing repeatedly at the correspondence in my lap, what instructions he should give his fifteen-year-old daughter, who wanted to be a writer.  I didn't know how to answer him, but before I could think I heard myself saying, "Tell your daughter three things.  Tell her to read, I said.  Tell her to read whatever interests her, and protect her if someone declares what she's reading to be trash.  No one can fathom what happens between a human being and written language.  She may be paying attention to things in the words beyond anyone else's comprehension, things that feed her curiosity, her singular heart and mind.  Tell to read classics like The Odyssey.  They've been around a long time because the patterns in them have proved endlessly useful, and to borrow Evan Connell's observation, with a good book you never touch bottom.  But warn your daughter that ideas of heroism, of love, of human duty and devotion that women have been writing about for centuries will not be available to her in this form.  To find these voices she will have to search.  When, on her own, she begins to ask, make a present of George Eliot, or the travel writings of Alexandra David-Neel, or To the Lighthouse.

Second, I said, tell you daughter that she can learn a great deal about writing by reading and by studying books about grammar and the organization of ideas, but that if she wishes to write well she will have to become someone.  She will have to discover her beliefs, and then speak to us from within these beliefs.  If her prose doesn't come out of her belief, whatever that proves to be, she will only be passing along information, of which we are in no great need.  So help her discover what she means.

Finally, I said, tell your daughter to get out of town, and help her do that.  I don't necessarily mean to travel to Kazakhstan, or wherever, but to learn another language, to live with people other than her own, to separate herself from the familiar.  Then, when she returns, she will be better able to understand why she loves the familiar, and will give us a fresh sense of how fortunate we are to share these things."

Read.  Find out what you truly believe.  Get away from the familiar.  Every writer, I told him, will offer you thoughts about writing that are different, but these are three I trust.

           From: Apologia, by Barry Lopez (1998) 

IV. CLASS ATTENDANCE, PREPARATION, and DISCUSSION

You are expected to come to class prepared to learn.  Learning requires curiosity, struggle (which can be frustrating at times), hard work, taking chances, getting messy, making mistakes, asking AND answering questions.

The emphasis in this class will be on actively developing your thinking.  Everything we do in this class will be designed to help you become better and better at thinking within economics. You will be required to internalize information by using it actively in every class and in class assignments. 

 

Each day we will be attempting to improve our thinking.  Think of learning about thinking within economics as you would of learning a sport.  To learn to play tennis, you need to first learn the fundamentals of tennis at an elementary level and then practice those fundamentals during every practice session.  The same is true of learning to think better within this field.  You must be introduced to the fundamentals of sound thinking.  Then you must regularly practice those fundamentals.  Why is this important?  The quality of every decision you make will be directly determined by the quality of your reasoning abilities.  In fact the quality of your life in general will be determined by how well you think in general.

 

What is my role?  To continue with the sports analogy, the majority of my time will be spent “coaching” you, on the sidelines, listening to peer interaction, providing feedback on the sorts of problems in thinking in which you are engaged.  I want to coach you to think better within economics.  Just as in basketball where players learn to play better by learning the fundamentals and practicing playing the game while focusing on the fundamentals, the way you improve your ability to think within economics is by learning the fundamentals of good thinking and then practice thinking through problems and issues within the content.  You must do this over and over.

 

Because the majority of class time is not spent on me “imparting information”, if you miss a class, please do not ask me to give you a private lesson.  Office hours are not to be used to get notes from a class period you missed, but rather to continue conversations or debates begun in class, to get your questions answered, and to answer questions I have. 

CELLPHONE/COMPUTER POLICY: Cell phones and computers are not allowed to be used during class. They disrupt other students and prevent you from engaging in class discussion.  THEY WILL BE CONFISCATED without warning!

The presumption of your registration for this course at this time period is that you are able to attend class, arrive on time, and not depart early.  You are responsible for all material covered and announcements made in class.  

V. ACADEMIC INTEGRITY

You are expected to adhere to UWL's Academic Integrity Resolution, passed by the Student Senate, 2/1/96.

                                            Academic Integrity Resolution:
We, the students of UW-La Crosse, believe that academic honesty and integrity are fundamental to the mission of higher education. We, as students, are responsible for the honest completion and representation of work and respect for others' academic endeavors. It is our moral responsibility as students to uphold these ethical standards and to respect the character of the individuals and the university.

 

VI. DISABILITY RESOURCE SERVICES  

 

Any student with a documented disability (e.g., physical, learning, psychiatric, vision, or hearing, etc.) who needs to arrange reasonable accommodations must contact the instructor and the Disability Resource Services office (165 Murphy Library) at the beginning of the semester. Students who are currently using the Disability Resource Services office will have a copy of a contract that verifies they are qualified students with disabilities who have documentation on file in the Disability Resource Services office.

 

VII. GRADING

The class will not be graded on a curve. It is theoretically possible for the whole class to get an A or an F. You will not be competing against each other and therefore it is worthwhile to help each other improve. You should focus on learning, improving your performance as an economic thinker, increasing your strengths and diminishing your weaknesses.   Updated grades can be found on the course website on D2L.  

The final grade will be determined by the following:

 

Percentage of Final Grade

Quizzes

  20%
Assignments   15

Final Exam  

  30

Empirical Paper 1 

    8
Empirical Paper 2    10
Empirical Paper 3    12
Engagement     5

     TOTAL

100%

 

 A.    In-Class Quizzes

The 3 quizzes are designed to give you and me an indication of your understanding of course concepts, provide you with feedback on areas that need improvement, and prepare you for the final exam.  They take about 1 hour and will be worth 35 points each.  I will drop 1 quiz when evaluating this portion of your final grade. No make-ups will be given.  If you must miss a quiz because of an emergency, that quiz score will be the one dropped.

B.    Assignments

The assignments are designed to help improve your understanding and to prepare you for class discussion surrounding the assigned readings.  I will drop one assignment (excluding assignments which everyone must do) when evaluating this portion of your final grade. No make-ups will be given.  If you must miss an assignment because of an emergency, that assignment will be the one dropped.

 

Grading Scale for assignments: 0=not turned in or no thought given to the assignment or not original; √- =incomplete (worth 1 point);  √=complete (worth 2 points)

 

NOTE: 

1.    ALL ASSIGNMENTS ARE DUE AT THE BEGINNING OF CLASS.  Please place your assignment in the box labeled "ASSIGNMENT" in the front of the room as you come in.  No assignments will be accepted once class begins.

2.    NO EMAILED ASSIGNMENTS WILL BE ACCEPTED.  NOTE: The reason I ask you to make a hard copy of your assignments is because I want you to have the assignment in front of you while we are discussing the material/issue it covers.

3.    ALL ASSIGNMENTS MUST BE TYPED.

 

C.    Final Exam  Date & Time in CWH 114:  7:45-9:45 on Monday Dec 19

In the final exam, I will ask you to identify and explain important economic terminology, concepts and theories; interpret information, data, history, events from an economic and legal point of view; apply economic concepts in new settings and real-world situations; and empathize with different points of view and economic beliefs.

D.    Empirical Research Papers

We will be engaging in scientific research in order to better understand market outcomes in professional sports and to learn about how economists work.  This involves the following:
    1. Identifying the research problem
    2. Engaging in a  review of the literature to better understand the problem (Note:  articles from the Journal of Sports Economics and Journal of Quantitative Analysis in Sports will be helpful)

    3. Developing a theoretical explanation of the problem
    4. Developing a research hypothesis that allows empirical testing
    5. Collecting data that allows the testing of the hypothesis
    6. Analyzing the data
    7. Preparing and presenting the results

Empirical Report 1: A short report designed to introduce you to economic research. The focus will be on testing human capital and discrimination theories and identifying the most overpaid and underpaid players.  In this project, the class will collect and compile the data you will analyze using SPSS software.

Empirical Report 2: You will conduct original research on an economics issue in professional sports in which you empirically test an economics theory.  This research will be similar to Research Report 1, in which you are expected to use the lessons you learned from Empirical Report 1. The topic and data will be announced at a later date. This typed, independent, original research project will also involve analyzing secondary data using SPSS software.                                                                                                      

Empirical Report 3: You will conduct original research on an economics issue in professional sports in which you empirically test an economics theory.   This research will be similar to Research Report 1, in which you are expected to use the lessons you learned from Empirical Reports 1 & 2. The topic and data will be announced at a later date. This typed, independent, original research project will also involve analyzing secondary data using SPSS and is due Wednesday Dec 21, 2011.

Your papers will be evaluated based on criteria that will be available on my  website. Late papers will be penalized 10% for each day late, including weekend days. Your reports must follow the outline  below.

Outline for Research Papers

I. Introduction
        A. Background

        B. Theoretical Framework
        C. Review of Related Literature
II. Research Purpose
        A. Statement of the Topic
        B. Research Hypothesis
        C. Importance of the Study
III. Research Design
         A. Data
               1. Description of Data
               2. Source of Data
         B. Descriptive Statistics and Discussion
         C. Description of Statistical Tests
IV. Results and Analysis
         A. Results

          B. Interpretation of Results
V. Conclusion and Recommendations
          A. Conclusion
          B. Recommendations
          C. Limitations of the Study
VI. List of References
Appendix              

E.    Active, skilled engagement

 

Most of class will resemble a seminar, a collective endeavor in which all participants learn from each other.  The quality of the discussion depends on your preparedness and active participation.  I will often ask you to come to class prepared with information in writing that will enhance the class discussion.  These will occasionally be collected and reviewed.  You will also be required to participate in a few events outside of class.  Failure to attend most of the few events and to prepare and contribute to class discussion affects your learning as well as that of your classmates.  This is an active-learning course...Remember:

"One must learn by doing the thing; though you think you know it, you have no certainty until you try." Publilius Syrus, Moral Sayings

Engaged Learners

1. Are active learners who see their role not only as learners but as active contributors to other students' learning.

2. Read carefully and think about the assigned readings and texts in the class and are well prepared to participate meaningfully in discussions.

3. View the class as an opportunity to learn and to develop important skills not just as a required course to get a degree.

4. Are prepared to take risks as a student and adapt to a role that emphasizes engagement as a learner, not the role of meeting minimal expectations.

5. Understand that the point of class is learning, not grades.

 

Examples of how you can show you are an engaged learner:

1. You come to class.  You can only participate in discussion if you are in class, so I will be taking attendance as a record of your potential to be an active, skilled participant. 

2. You contribute to AND LEAD class discussions.

3. You submit articles, podcasts, video clips (from Daily Show, Colbert Report, YouTube, etc...), etc., related to class topics for me to share with the class.

4.  You attend an on-campus or off-campus event related to class material and discuss it with the class.

5.  You stop by my office to discuss class material.

6.  You find answers to questions posed in class.  When a question arises in class, I will frequently assign finding the answer to a student(s) assigned as the discussion leader (DL) to report back to the class.   

7. When called upon to give your opinion, you give it.

8. When you are assigned a task or problem in class, you do it, rather than sit passively expecting someone else to give you the answer.  If you don't understand the task or problem, you ask questions.

9. You do NOT do the following or any other rude behavior.  Your engagement grade will be significantly, negatively affected.

At the end of each class, I will ask you to record on an index card, which I will collect, what you did in class or in office hours since the last class to show active skilled engagement AND to grade yourself using the following system:

        1=Attended class but no active participation

        2=Actively participated (provide summary of your contribution)

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