Attendance demand in a developing football market: the case of the Peruvian First Division

Research question: Most of the empirical research on football demand has focused on leagues in developed countries while those in developing countries have received comparatively limited attention. In the absence of more specific analyses of leagues in developing countries, an implicit assumption is that the demand for football across different economies is homogenous. However, such an assumption may lead to inappropriate policies. Therefore, decision-making and policies aimed at attendance and pricing in developing countries should be substantiated with empirical evidence reflecting their settings. Research methods: This paper models match level attendance demand and price in the first tier of the Peruvian football league from 2012 to 2016 inclusive. Using a sample of 1719 matches, two-stage least-squares estimation with instrumental variables is used. Results and findings: We find that attendance in the Peruvian football league is driven by market size, distance between teams and recent performance while local rivalry and price do not exert significant impacts. More importantly, attendance exhibits properties of an inferior good given its relationship with levels of poverty and associated correlation with income. Implications: The implications are that demand models for football in developing and developed economies generate different results as the impacts of some exogenous variables on attendance offer different outcomes. For example, the impact of price and income differ from prior expectations indicating that different approaches are necessary to managing football in developing countries including distinct policies on stadium accommodation