Football pools sales: How important is a football club in the top divisions?

Abstract

Having a professional sport team in the top divisions has a potential economic impact in its geographical area. In this paper we analyse the effect of having a professional football team of the Spanish First or Second Division in a certain province on the amount of sales of football pools in Spain (La Quiniela). To carry out the empirical exercise we estimate a demand equation using a panel data set at provincial level for the years 1985-2005, merging the traditional economic models in the lotto demand literature: the effective price model and the jackpot model. Our results show that having a club in the top divisions has a significant effect on sales of La Quiniela. Moreover, previous results using fixture (round) data are confirmed in this paper. We also provide evidence showing La Quiniela bets to be a normal good and, as an implicit tax, regressive.