Literature Review #5

The Empirical Effects of Collegiate Athletics: An Interim Report

Robert E. Litan (Shown above)

Jonathan M. Orszag

Peter R. Orszag

MLA Citation:

Litan, Robert E., Jonathan M. Orszag, and Peter R. Orszag. 2003. The Empirical Effects of Collegiate Athletics: An Interim Report. Washington, DC: Sebago Associates. Commissioned by the National Collegiate Athletic Association, August.

Summary:

This empirical report economically summarizes several different hypotheses regarding collegiate athletics. In regards to my paper (the report is very long), it gives conclusive evidence involving the correlation between winning percentages of Division I football teams and alumni support. It uses statistics and empirical econometric analysis to reach these conclusions.

About the Author:

Robert E. Litan is the Vice President for Research and Policy at the Kauffman Foundation in Kansas City, Missouri. He is also Senior Fellow in Economic Studies at the Brookings Institution and has formerly served as Deputy Assistant Attorney General in the Antitrust Division of the U.S. Department of Justice.

Key Terms:

Institutional Support- monetary revenue granted to a school's athletic program from other parts of the school.

Adjusted Net Revenue- a sports program's final revenue after institutional and state support are subtracted.

Quotations:

"The correlation of winning percentages two years apart is 33 to 51 percent; that correlation suggests some degree of mobility in winning percentages from year to year."

"Expanded athletic programs appear to be neither the road to riches nor the road to financial ruin."

"Indeed, looking across Division I-A in 2001, schools that spent more on football tended to have higher levels of net revenue from football than schools that spent less on football (Figure 8)."

Value:

This report simply provided me with another much-needed economical view at the compensation debate. It discusses the correlation between winning percentages and alumni donation, which supports one of the anti-compensation arguments analyzed in my paper.