I’ve begin to write up the absract of my research proposal, and found it difficult to keep myself out of it. Using objective language and keeping sentances to the point is much harder than anticipated. The literature currently collected and fitted into the matrix is 14 papers; a wide spread from Concession Pricing, Variable ticketing to VAR models to test mono or bi-laterial causality. Through the mix of these papers, it became increasingly cloudy on what I was focused on. From this, it became clear I have been trying to do to much with little time, in an attempt to work harder, and not smarter.
At this point in time, the research is highlighting intresting points that are not commonly considered with typical products. For example:
– Clubs are not mono product regional monopolists. Clubs can be considered as providing the team on the pitch, but also providing ancillary goods and services, such as merchandise, additional entertainment and match day services
– Willingness to pay is captured through the A-League model of variable ticket pricing; catergorising tickets into A, B and C. A being the most expensive, to C being the lowest ticket price and the minimum a person is willing to pay to watch the match
– Ticket prices for higher categories should be more elastic, while ticket prices for lower categories should be more inelastic.
– By traditional product standards, pricing in the inelastic portion of the demand curve is inefficient, however clubs may not be profit maximising, but focused on winning matches to source additional revenue outside of ticket prices.
Much of this research is found through Silvestri (2017), to which a Two Stage Least Squares model is adapted to find match day and club specific variations in elasticity. For my research, it is important to note that sport in Australia is a large market with many competitors, some with deep historical value. This will need to be acocunted for in the model and if this is not possible, will be a drawback in the report. While many papers look at sports that have existed in the market for a historical time; Major League Baseball in America (aptly named “America’s Past-time”), the 121 year old SerieA competition in Italy; the gap in the Australian football market leaves new ground to be broken on the nature of responsiveness to a sporting competition which by comparasion, is relativly new.
My next steps from here are to begin formalising the process to which the following will be tested against:
For the context of the Australian Football Market, the paper will analyse if ticket prices are important in determining attendance and based on this, if it is justified to price in the inelastic or elastic area of the demand curve.
With the data avaliable, this will be on n=142 on the 2015/16 season of the A-League.
My hope is that with the equipment on offer, the paper will be able to bring to life the conversation of effective pricing of football matches and ability to improve accessibility to match day events.
Next Steps:
– Formalise the Literature Review; additionally find papers on inelasticity on entertainment events
– Begin to shape the variables using data. Obtain additional seasons if possible to create richer data set
– Determine the story the model will tell, and if a split model is more viable in determining results.
