NHL Fan Analysis Part 3: Sensitivity of Attendance to Price

Note: This is Part III of our study of NHL Fan Quality.  This week we will be ranking NHL teams/fans on the following dimensions: Fan Equity, Social Media Equity, Fan Equity Growth, Price Elasticity, Win Elasticity, and Social Media based Personality.  For more details on our measures of quality, please click here.  For Part I, click here.  For Part II click here.

The next study in our NHL fan analysis is a quick look at price sensitivity.  The central idea here is to understand (statistically) which teams’ fans are the most value-oriented and which are willing to spend.  The results are based on a regression model that predicts home attendance based on winning rates, prices, team fixed effects and interactions between the winning rates, prices and team dummies.

The most “value-oriented” fans live in Columbus, Ohio.  The Blue Jackets are in a tough competitive position.  While the Blue Jackets have fewer resources than most of the other NHL teams, their local competition is one of the biggest spenders and most successful college programs.  Following Columbus, other frugal fans reside in Colorado, St. Louis, and Minnesota.

On the other extreme, we have teams whose fans seem to be insensitive to the prices charged.  At the top of this list are the Buffalo Sabres.  The Sabres are followed by the Red Wings, Blackhawks, Bruins and Dallas Stars.  And interesting aside in this analysis is that several of these markets like Detroit and Chicago also made our list of teams with high sensitivity of attendance to winsWhile our conclusions are limited by our use of aggregate data this observation does suggest that these teams would be better served by increasing prices and using the incremental revenues to enhance team quality (assuming they have room under the salary cap). 

Mike Lewis & Manish Tripathi, Emory University 2014.