Convergence, clustering and their effects on attendance in the Japan Professional Baseball League

Abstract

In this research, using a panel data set for the Japan Professional Baseball League (JPBL) during the post-WWII period, we apply the technique developed by Hobijn and Franses (2000) to examine the competitive balance from the view point of convergence and its effect upon game attendance. The JPBL comprises two leagues, the Central League (CL) and the Pacific League (PL). The CL is far more popular with fans than the PL. Our estimation results showed that the number of the PL clusters continues to go towards unity, thereby raising the uncertainty of the outcome to increase the PL game attendance more rapidly. Also, attendance by CL fans tends to be more inelastic with team performance than for the PL. Therefore, the PL payroll was more elastic to wins than that of the CL. The features of each League have crucial impacts on the outcomes and the behaviours of team insiders such as players and managers.

Notes

¹ Recently, researchers have explored the relationship between institutional change and competitive balance (Horowitz, 1997; La Croex and Kawaura, 1999; Schmidt, 2001; Butler, 1995; Schmidt and Berri, 2002a, b, 2004).

² Some reports have paid attention to and explored the JPBL, mainly from the view point of labour economics (Ohtake and Ohkusa, 1994; Ohkusa and Ohtake, 1996; Ohkusa, 1999, 2001). One exception is La Croix and Kawaura (1999) who examine the effect of institutional change on the competitive balance in the JPBL.

³ Hobijn and Franses (2000) offer an algorithm to estimate the number and composition of the cluster. For a more detailed explanation of the algorithm, the reader is referred to Hobijn and Franses (2000).

⁴ Hobijn and Franses (2000) define three kinds of convergence – (1) asymptotically perfect convergence; (2) asymptotically relative convergence and (3) convergence of growth rate. We focus only on asymptotically perfect convergence in this article.

⁵ See original paper (Hobijn and Franses, 2000) in detail.

⁶ JPBL was inaugurated in 1936 and was at the outset one-league system till 1949.

⁷ The aggregated-level data are constructed by the individual team data.

⁸ The Giants were the first team to learn the strategy of the Major League from the Los Angeles Dodgers through a camp in the Dodgers city in 1961 (Nomura, 2006).

⁹ It is said that the revenue yielded by the Giants reached 300 billion yen, which is almost equivalent to that of the New York Yankees (Kobayashi, 2004, p. 200).

¹⁰ Almost all games of the Giants were broadcast over a nationwide hook-up because the Giants owner and sponsor is the Yomiuri group, a newspaper publishing company that holds subsidiary companies including the TV broadcasting company, Nihon Television.

¹¹ On top of the Gini coefficient, the degree of competitive balance so far has been investigated via various measures, such as the SD (Quirk and Fort, 1992; Schmidt and Berri, 2002a), the dispersion and season-to-season correlation of team winning percentage (Butler, 2002), the relative entropy approach(Horowitz, 1997), the index of dissimilarity (Mizak and Stair, 2004), Hirschman–Herfindahl Indices (La Croex and Kawaura, 1999) were used as measures for the degree of competitive balance. The trends of competitive balance are unchanged when we use measures as mentioned earlier.

¹² We average the two previous estimates with the two future estimates in order to obtain smoothed estimates.

¹³ The PL introduced a split season system in 1973 to increase the PL's popularity, but returned to a single season pennant race in 1983.

¹⁴ The Japan Professional Football League was inaugurated in 1993 and appears to have had a negative impact upon the PL's catching-up process.

¹⁵Richards and Guell (1998) suggested a potential view that a team may be content to surround a superstar with second-rate talent in order to attract paying customers to the ball park. In other words, a team with a low winning ratio can gather a lot of attendance due to the popularity of the superstar.

¹⁶ According to Tsuneo Watanabe the former owner of the Giants, the Tigers brought up the stars which are a favourite with the local fans. These super-star effects outweighed the team performance, thereby drawing attention of fans.

¹⁷ Using panel data of JPBL from 1993 to 2004, Yamamura (2007) found through regression analysis that a team payroll has a remarkably positive impact on the outcomes of PL team performance; however, it has none on CL teams. Necessarily, the disparity in team payroll leads to a competitive imbalance in the PL, but not in the CL.

¹⁸Kahane and Shmanske (1997) pointed out that the turnover of the composition of the team decreased the attendance. Winfree et al. (2004) found that the closer the two teams are, the lower attendance is at each team relative to two teams that are farther apart.