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181–199. Sloane, P. J. (1971) The economics of professional football: The football club as a utility maximiser, Scottish Journal of Political Economy, 8, pp. 121–146. Smart, R. A. & Goddard, J. A. (1991) The determinants of standing and seated football attendances: Evidence from three Scottish League clubs, Quarterly Economic Commentary, 16, pp. 61–64. 26 Football Economics and Policy Smith, R. & Szymanski, S. (1995) Executive pay and performance, the empirical importance of the participation constraint, International Journal of the Economics of Business, 2, pp.
Competing for position itself is a zero-sum game, but an owner who wishes to improve position spends money on players. But spending on players puts upward pressure on the quality-adjusted wage rate, increases the rent extracted by players and puts downward pressure on proﬁts. 22 A consequence of this ‘excessive’ competition for players is that clubs have fewer resources available for the purchase of other inputs required to produce services consumed jointly with attendees at a football match: a safe, comfortable environment, refreshments and so on.
The club-speciﬁc intercepts capture effects such as local population size, age and gender structure and wealth, which will inﬂuence demand for football. Given the severe difﬁculties in deﬁning these variables properly,18 we do not believe that using club-speciﬁc intercepts is in practice likely to involve much loss of accuracy. The implied long-run price elasticity from the equation without time dummies for each year is −0. 76, but this falls to −0. 34 when time dummies are allowed (with a t-statistic of −2.