Reference-dependent preferences in the case of Allsvenskan: Outcome uncertainty and live-game attendance

Sammanfattning: This thesis studies how different preferences for uncertainty affects live game attendance in the Swedish premier football league Allsvenskan. A framework proposed by previous literature concerning this relationship is highlighted. In the presence of reference dependency, two types of preferences is of interest. On one hand, there is the Uncertainty of Outcome Hypothesis (UOH), stating that uncertainty drives attendance. On the other, there are loss averse preferences, predicting higher attendance on games where the outcome is certain. To examine what preferences holds for Allsvenskan, a panel data regression is used to investigate the relationship between the level of uncertainty and attendance. The probability of a home team win, derived from the odds, is used as a proxy for the uncertainty present in the game. Our panel includes data on twelve teams that have participated in Allsvenskan during the seasons 2014-2016. The dataset is created by combining game-by-game statistics from the official webpage of Allsvenskan, with odds data compiled from 20+ bookmakers. Additionally, other sources are used to obtain data on control variables which rounds out the set. Ultimately we find the UOH to be present in the aggregate spectator of Allsvenskan. Also, Attendance is found to peak at a point where the probability to win is 61,5%.