Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Working Knowledge
Business Research for Business Leaders
  • Browse All Articles
  • Popular Articles
  • Cold Call Podcasts
  • About Us
  • Leadership
  • Marketing
  • Finance
  • Management
  • Entrepreneurship
  • All Topics...
  • Topics
    • COVID-19
    • Entrepreneurship
    • Finance
    • Gender
    • Globalization
    • Leadership
    • Management
    • Negotiation
    • Social Enterprise
    • Strategy
  • Sections
    • Book
    • Cold Call Podcast
    • HBS Case
    • In Practice
    • Lessons from the Classroom
    • Op-Ed
    • Research & Ideas
    • Research Event
    • Sharpening Your Skills
    • What Do You Think?
    • Working Paper Summaries
  • Browse All
    • COVID-19 Business Impact Center
      COVID-19 Business Impact Center
      The Dynamic Advertising Effect of Collegiate Athletics
      08 Feb 2013Working Paper Summaries

      The Dynamic Advertising Effect of Collegiate Athletics

      by Doug J. Chung
      The primary form of mass media advertising by academic institutions in the United States is, arguably, through its athletics program. This study investigates the possible advertising effects of intercollegiate athletics. Specifically, it looks at the spillover effect and the magnitude and divergence that athletic success has on the quantity and quality of applications received by an academic institution of higher education in the United States. Overall, findings show that athletic success has a significant impact on the quality and quantity of applicants to these institutions. However, athletic success has relatively more importance to the students with lower ability. Students of higher ability have a stronger preference for the quality of education compared to their lower-ability counterparts. Key concepts include:
      • When a school goes from being mediocre to being great on the football field, applications increase by 18.7 percent.
      • To attain similar effects, a school has to either decrease its tuition by 3.8 percent or increase the quality of its education by recruiting higher-quality faculty who are paid five percent more in the academic labor market.
      • Schools become more selective with athletic success. For a mid-level school, in terms of average SAT scores, the admissions rate improves by 5.1 percent with high-level athletic success.
      • Students with low ability value the historical success of intercollegiate athletics over longer periods of time.
      • Surprisingly, students with high SAT scores are also significantly affected by athletic success.
      LinkedIn
      Email

      Author Abstract

      I measure the spillover effect of intercollegiate athletics on the quantity and quality of applicants to institutions of higher education in the United States, popularly known as the "Flutie Effect." I treat athletic success as a stock of goodwill that decays over time, similar to that of advertising. A major challenge is that privacy laws prevent us from observing information about the applicant pool. I overcome this challenge by using order statistic distribution to infer applicant quality from information on enrolled students. Using a flexible random coefficients aggregate discrete choice model-which accommodates heterogeneity in preferences for school quality and athletic success-and an extensive set of school fixed effects to control for unobserved quality in athletics and academics, I estimate the impact of athletic success on applicant quality and quantity. Overall, athletic success has a significant long-term goodwill effect on future applications and quality. However, students with lower than average SAT scores tend to have a stronger preference for athletic success, while students with higher SAT scores have a greater preference for academic quality. Furthermore, the decay rate of athletics goodwill is significant only for students with lower SAT scores, suggesting that the goodwill created by intercollegiate athletics resides more extensively with low-ability students than with their high-ability counterparts. But, surprisingly, athletic success impacts applications even among academically stronger students.

      Paper Information

      • Full Working Paper Text
      • Working Paper Publication Date: January 2013
      • HBS Working Paper Number: 13-067
      • Faculty Unit(s): Marketing
          Trending
            • 29 Oct 2020
            • Research & Ideas

            The COVID Gender Gap: Why Fewer Women Are Dying

            • 13 Jul 2020
            • Research & Ideas

            Merck CEO Ken Frazier Discusses a COVID Cure, Racism, and Why Leaders Need to Walk the Talk

            • 11 Jan 2021
            • Research & Ideas

            Is A/B Testing Effective? Evidence from 35,000 Startups

            • 17 Feb 2020
            • Sharpening Your Skills

            How Entrepreneurs Can Find the Right Problem to Solve

            • 13 Jan 2021
            • Research & Ideas

            How 'Small C' Change Can Beat Large-Scale Rebuilding

        Doug J. Chung
        Doug J. Chung
        MBA Class of 1962 Associate Professor of Business Administration
        Contact
        Send an email
        → More Articles
        Find Related Articles
        • Marketing
        • Sports
        • North & Central America
        • United States

        Sign up for our weekly newsletter

        Interested in improving your business? Learn about fresh research and ideas from Harvard Business School faculty.
        ǁ
        Campus Map
        Harvard Business School Working Knowledge
        Baker Library | Bloomberg Center
        Soldiers Field
        Boston, MA 02163
        Email: Editor-in-Chief
        →Map & Directions
        →More Contact Information
        • Make a Gift
        • Site Map
        • Jobs
        • Harvard University
        • Trademarks
        • Policies
        • Digital Accessibility
        Copyright © President & Fellows of Harvard College