Saturday, October 23, 2010

Is the NCAA Welfare Enhancing? (Addendum)

I've found it harder to not watch college football than I hoped it would be. I admit I watched the second half of the UK-SC game last week and was quite happy with the outcome. But while I was sitting there, I did some research and stumbled across a working paper from Vanderbilt's economics department:
"What Does Intercollegiate Athletics Do To or For Colleges and Universities?" by Malcolm Geltz and John Siegfried.

They more scientifically ask the questions I pose in one of my posts on this subject. They look at various research done investigating the usual "benefits" listed by universities like boosting marketing, enrollment, and donations to the overall university. The authors find the anecdotal stories lack supporting evidence. Their concluding paragraphs (emphasis mine):

What has received virtually no attention is the opportunity cost accompanying any of these possible changes. If athletic success does boost donations and attract more and
better credentialed applicants to the successful institutions, from where do the donations and
students come, and is the reallocation of these resources efficient and equitable?

It is impossible to decide if the indirect effects of college athletics are desirable or undesirable
by looking at just one side of a reallocation of resources. If a university wants to attract
more or different students or to increase donations that support general academic purposes, might the funds currently spent subsidizing intercollegiate athletics be more productive in addressing these goals directly by bolstering the budgets of university development and admissions offices? Up to this point, the net social welfare and equity implications of any indirect effects of college sports on the institutions that host big-time intercollegiate teams really remain unknown. It is possible that these effects could be sufficiently large and undesirable to outweigh the consumers surplus created by the direct entertainment value of intercollegiate athletic competition.

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