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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | The effect of luxury taxes on competitive balance, club profits, and social welfare in sports leagues |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | International Journal of Sport Finance |
| Publisher | Morgantown, WV : Fitness Information Technology |
| Geographical Reach | international |
| ISSN | 1558-6235 |
| Volume | 5 |
| Number | 1 |
| Page Range | 41 - 51 |
| Date | 2010 |
| Abstract Text | This paper presents a model of a professional sports league and analyzes the effect of luxury taxes on competitive balance, club profits, and social welfare. It shows that a luxury tax increases aggregate salary payments in the league and produces a more balanced league. Moreover, a higher tax rate increases the profits of large-market clubs, whereas the profits of small-market clubs only increase if the tax rate is not set inadequately high. Finally, we show that social welfare increases with a luxury tax. |
| Related URLs | |
| Other Identification Number | merlin-id:710 |
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