Working Paper: NBER ID: w18196
Authors: Michael L. Anderson
Abstract: Spending on big-time college athletics is often justified on the grounds that athletic success attracts students and raises donations. Testing this claim has proven difficult because success is not randomly assigned. We exploit data on bookmaker spreads to estimate the probability of winning each game for college football teams. We then condition on these probabilities using a propensity score design to estimate the effects of winning on donations, applications, and enrollment. The resulting estimates represent causal effects under the assumption that, conditional on bookmaker spreads, winning is uncorrelated with potential outcomes. Two complications arise in our design. First, team wins evolve dynamically throughout the season. Second, winning a game early in the season reveals that a team is better than anticipated and thus increases expected season wins by more than one-for-one. We address these complications by combining an instrumental variables-type estimator with the propensity score design. We find that winning reduces acceptance rates and increases donations, applications, academic reputation, in-state enrollment, and incoming SAT scores.
Keywords: college athletics; donations; student applications; propensity score; instrumental variables
JEL Codes: C23; C26; I20; I23; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Winning football games (L83) | Acceptance rates at colleges (I23) |
| Winning football games (L83) | Donations (D64) |
| Winning football games (L83) | Number of applicants (C00) |
| Winning football games (L83) | In-state enrollment (I23) |
| Winning football games (L83) | Nonathletic donations (Z29) |