The Benefits of College Athletic Success: An Application of the Propensity Score Design with Instrumental Variables

NBER Working Paper No. 18196

Issued in June 2012

NBER Program(s):Economics of Education, Labor Studies, Public Economics



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.

A non-technical summary of this paper is available in the November 2012 NBER Digest. You can sign up to receive the NBER Digest by email.



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Document Object Identifier (DOI): 10.3386/w18196

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