Tuesday, July 24, 2007

Sports and the Economy

Looking for a good resource on sports and its impact on economic activity. Check out the Boston Federal Reserve Bank's resource on this subject.

For example: Why Do We Spend So Much Time and Money on Sports?

We spend a lot of time and money watching games. We pay premium prices for team jerseys and caps. Some of us camp out for the chance to fork over a fistful of cash for playoff tickets; or we spend an entire Sunday munching snack food and watching the NFL on TV. Why do we do it?
Economists approach the question through the concept of utility: We choose to spend our money on a product or service because we get a certain amount of use, pleasure, or satisfaction from consuming it.

Utility can be very practical. For example, we might decide to buy a generic baseball cap to corral our wild hair or keep the sun out of our eyes.

But then there are purchases that deliver a greater sense of psychic satisfaction. Sometimes we choose to pay twice as much for a different cap simply because it carries the logo of our favorite team.
The motivation for each purchase is different, but each involves personal choice, and we derive a certain amount of utility—use, pleasure, or fulfillment—from it.

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