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Differential customer racial attitudes toward scandal and patriotism: The Mitchell Report, the Olympics, race, and baseball memorabilia
The Social Science Journal 49 (2012) 214–218
Contents lists available at SciVerse ScienceDirect
The Social Science Journal journal homepage: www.elsevier.com/locate/soscij
Differential customer racial attitudes toward scandal and patriotism: The Mitchell Report, the Olympics, race, and baseball memorabilia Timothy J. Stanton ∗ , Curtis D. Johnson Mount Saint Mary’s University, United States
a r t i c l e
i n f o
Article history: Received 26 August 2010 Received in revised form 29 August 2011 Accepted 19 September 2011 Available online 17 April 2012 Keywords: Customer discrimination Baseball memorabilia Baseball cards Differential treatment
a b s t r a c t This paper investigates differential customer racial reaction to negative and positive publicity related to professional athletes. In terms of negative publicity, it analyzes the effect of mention in the Mitchell Report on the price of baseball cards. In regards to positive publicity, it considers the impact of having been identified as a member of the United States Olympic or national team. After controlling for player productivity with performance statistics, the effects of being mentioned in the Mitchell Report are isolated within regression analysis to draw conclusions concerning customer racial attitudes toward the steroids scandal. Similar analysis is conducted to see the impact of being seen as a baseball representative of the United States. Regression results are consistent with the conclusion that negative publicity devalues the cards of nonWhite players but not of White players. Positive publicity, however, increases the value of a player’s card regardless of ethnicity. © 2011 Western Social Science Association. Published by Elsevier Inc. All rights reserved.
1. Introduction Sports markets have proven to be interesting and fruitful avenues for research into a variety of contemporary issues. The readily available data on market outcomes allows focus on specific topics of interest. One such line of research uses the market for baseball memorabilia to investigate customer racial discrimination against players. In the first instance of this research, Nardinelli and Simon (1990) found that the prices of baseball cards of nonWhite players were less than those of White players of similar statistical productivity, suggesting customer racial discrimination against nonWhite players. Since that groundbreaking article, several others have expanded on the investigation of race and baseball cards. Gabriel, Johnson, and Stanton (1995, 1999) emphasized customer expectations and found mixed results with regards to differential treatment of
∗ Corresponding author at: School of Business, Mount Saint Mary’s University, 16300 Old Emmitsburg Road, Emmitsburg, MD 21727, United States. Tel.: +1 301 447 8300; fax: +1 301 447 5335. E-mail address: [email protected] (T.J. Stanton).
baseball cards of nonWhites, while Scahill (2005) concluded that race was generally not a statistically significant variable in explaining card prices after 1992. Regoli, Primm, and Hewitt (2007) concluded that player performance and not race determined the ranking of cards within the entire card set. Stone and Warren (1999) and Primm, Regoli, and Hewitt (2006) have done similar studies with basketball and football cards, respectively. Less research has been done in regards to how offthe-field events can affect buyer preferences and, as a consequence, card prices. While Matheson and Baade (2004) examined the “death effect” on card prices, little other work has been done in regards to evaluating non-performance events on buyer choices. In this study, we examine two such off-the-field events: scandal (being listed as a user of performance enhancing drugs in the Mitchell Report) and patriotism (being listed as a player on the United States Olympic Team). 2. Scandal Ongoing concerns about differential treatment of players based on ethnicity manifested themselves during the
0362-3319/$ – see front matter © 2011 Western Social Science Association. Published by Elsevier Inc. All rights reserved. doi:10.1016/j.soscij.2011.09.003
T.J. Stanton, C.D. Johnson / The Social Science Journal 49 (2012) 214–218
ongoing steroid abuse scandal in Major League Baseball. Some charged that nonWhite players suspected of steroid use are treated differently than are White players under suspicion. This essay investigates that possibility. Using the Mitchell Report of Major League Baseball, which identified players suspected of steroid use, we posit that the price of baseball cards are determined by player performance statistics and possibly by suspicion of steroid use. We further extend our model to investigate possible price differentials based on ethnicity and steroid use. 2.1. Background Of all the major sports, baseball has arguably been the most scandalized by player use of performance enhancing drugs. While in the 1980s baseball was sullied by player use of recreational drugs, notably cocaine, the 1990s and 2000s saw players using illegal drugs, typically anabolic steroids, to gain a perceived edge in on-field performance. As fans and sports writers watched long-established records fall at what seemed like a yearly pace, some raised questions as to the reason. Were modern players simply better due to enhanced instruction and training? Or were there more sinister reasons for superior performance? Investigative reporters for various news outlets produced evidence of steroid use by certain players, but the extent of such use was unclear. Jose Canseco’s controversial expose, Juiced, charged use by specific players but such allegations were frequently denied. Even player testimony before Congress was ambiguous. To address this issue, Major League Baseball formed a commission to investigate reports of player use of steroids. Headed by former United States Senator George Mitchell, this report was dubbed the Mitchell Report. Released in December of 2007, the report included 89 players alleged to have used performance enhancing drugs (Wilson & Schmidt, 2007). An important question that arises from the release of this report is fan reaction. Do fans have a different attitude toward players implicated in steroid use? Of particular importance for this research, are there racial differences in fan reaction to alleged steroid use? To investigate these issues, we employ the approach first used by Nardinelli and Simon (1990); we posit that market prices for baseball cards capture customer reaction to mention in the Mitchell Report and that we can isolate these effects statistically. Specifically, we use the methodology of Gabriel et al. (1995) which investigated the prices of rookie cards and analyzed Topps rookie cards issued between 1980 and 1994. In this paper, we analyze Topps rookie cards issued between 1980 and 2003, effectively capturing the time period when Mitchell Report players entered the league. The April 2008 issue of Beckett Baseball Card Monthly provides the price information while The ESPN Baseball Encyclopedia (Gillette & Palmer, 2008) provides player performance statistics. 2.2. Model and results The general form of our model is (Gabriel et al., 1995) ln P − ln Pc = ˇX + ε
(1)
215
where P, the price of a card; Pc , the common price of a card; X, a vector of observable player characteristics; B, a vector of parameters; ε = stochastic error with mean 0 and constant variance. The dependent variable is the natural logarithm of the ratio of the card price to the common price, which is the lowest priced card in the set for that year. Player characteristics include performance measures, ethnicity, and mention in the Mitchell Report. Ordinary least squares allow us to estimate the parameters in Eq. (1). Our conclusions about attitudes toward steroid scandal and differential treatment follow from our estimates. Our initial specification captures the effect of being mentioned in the Mitchell Report, regardless of race. Given the small number of pitchers from our data set who are mentioned in the Mitchell Report, we analyze hitter data only. Appendix A provides a detailed description of the variables. ln P − ln Pc = ˇ0 + B1 AB + B2 HITS + B3 DOUBLES + B4 TRIPLES + B5 HOMERUNS + B6 WALKS + B7 SB + B8 POSITION + B9 POST + B10 ACTIVE + B11 AGE + B12 MITCHELL + ε (2)
Besides offensive productivity measures, this model includes dummy variables for position to capture differences in anticipated output based on position played. For example, outfielders generally produce higher offensive numbers than do middle infielders, who more likely play for defensive purposes. The variable POST measures the number of post-season games in which a player participated. ACTIVE is a dichotomous variable to capture if the player was still active in the 2008 season. Of the 295 players in this data set, 80 were still active in 2008. AGE measures the player’s age as of April 1, 2008. MITCHELL indicates whether the player was implicated in the Mitchell Report. A limitation of a dummy variable approach our results concerning Mitchell is that we cannot capture the intensity of suspected steroid use. Some players were implicated in experimenting with steroids once while others were implicated as habitual users. Presumably, card collectors would view the latter group with more disfavor; however, we could not develop an operational, objective measure of intensity. Another possible effect that our model might capture is that card value might actually increase for players implicated in steroid use. After all, players mentioned in Mitchell are a subset of all players; thus, cards of these players are relatively rare. Collectors might value such cards more because of their scarcity. Would Mark McGwire’s rookie card be viewed as more valuable because of the taint of scandal? We conclude that this is a possibility. Alternately, some implicated players have admitted steroid use while others continue to deny using steroids. Collectors might value the admission and contrition of some players mentioned in the Mitchell Report.
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T.J. Stanton, C.D. Johnson / The Social Science Journal 49 (2012) 214–218
Table 1 Effect of Mitchell Report, no ethnicity.
Table 2 Effects of ethnicity and Mitchell Report.
Term
Estimate
t ratio
Prob > |t|
Term
Estimate
t ratio
Prob > |t|
Intercept AB Hits Doubles Triples HR Walks SB Catch First Second Short Third Post Active Age Mitchell
1.9850 0.0000 0.0014 −0.0037 −0.0053 0.0026 0.0001 0.0007 0.1477 0.2148 0.0463 0.1095 0.0204 0.0067 0.2529 −0.0290 −0.4410
4.6792 −0.4222 3.8337 −2.3333 −1.3170 3.8382 0.2851 1.3648 0.9718 1.4063 0.3173 0.6343 0.1325 2.4627 1.7921 −2.7090 −2.2307
0.0000 0.6732 0.0002 0.0203 0.1889 0.0002 0.7758 0.1734 0.3320 0.1608 0.7512 0.5264 0.8947 0.0144 0.0742 0.0072 0.0265
Intercept AB Hits Doubles Triples HR Walks SB Catch First Second Short Third Post Active Age nonWhiteNo WhiteYES nonWhiteYes
2.0392 0.0000 0.0014 −0.0041 −0.0051 0.0027 0.0001 0.0007 0.1079 0.1853 0.0295 0.0952 −0.0265 0.0070 0.2654 −0.0295 −0.0704 −0.3243 −0.7713
4.7420 −0.4017 3.9301 −2.5040 −1.2740 3.9888 0.2791 1.3993 0.6878 1.1973 0.2008 0.5494 −0.1656 2.5696 1.8742 −2.7543 −0.6671 −1.3586 −2.2142
0.0000 0.6882 0.0001 0.0129 0.2037 0.0001 0.7804 0.1629 0.4921 0.2322 0.8410 0.5832 0.8686 0.0107 0.0620 0.0063 0.5053 0.1754 0.0276
N = 295; R2 = 0.5666; F = 22.71.
There is also the real possibility that steroid use does not affect how collectors value cards. Buyers could judge players by their on-field performance and be indifferent on how such players achieved their accomplishments. Table 1 presents this initial regression. R-squared is 0.57, and the model is statistically significant at 5%. Individual results are consistent with previous studies. Hits and home runs are positively correlated with card price. Position dummies are not statistically important. Playoff participation is positive and significant. Cards of active players command a marginally significant higher price while higher ages are associated with lower card price. Of particular relevance for the current study is the variable, MITCHELL, which captures the effect of being mentioned in the Mitchell Report. Its coefficient is negative, suggesting that cards of players associated with steroid use are discounted relative to their peers; further, the t ratio is statistically significant. These results provide evidence consistent with buyers discounting the cards of players implicated in the steroid scandal. Our next specification of the general model captures inclusion in the Mitchell Report and ethnicity. It includes dummy variables to capture four categories of players: Whites who have used steroids, Whites who have not, nonWhites who have, and nonWhites who have not. Table 2 presents these results. The excluded category is Whites who were not implicated in the Mitchell Report; hence, all comparisons for the included dummy variables should be to this excluded category. Results with respect to performance variables are similar to previous estimations. The coefficient on nonWhiteNo is not statistically significant, indicating no differential treatment between White and nonWhite players not implicated by Mitchell. This result further reinforces previous research (Scahill, 2005) that found no differential treatment based on ethnicity in the price of cards. While the coefficient on White players implicated in the Mitchell Report is negative, indicating that collectors discount the card price of such players, this result is not statistically significant. The coefficient on nonWhite players suspected of steroid use is likewise negative; however, it is statistically
N = 295; R2 = 0.5690; F = 20.24.
significant at 5%. Further, the coefficient on the nonWhite variable is twice as large in magnitude as the coefficient on the White variable. These results suggest that collectors discount the card price of nonWhites implicated in the Mitchell Report but do not do so for Whites who were implicated. 3. Patriotism If negative publicity regarding steroid use does not diminish player memorabilia in the eyes of collectors, what impact does positive publicity, such as representing the United States in international competition such as the Olympics, have on player memorabilia? Every four years from 1984 through 2008, the United States sent a team of minor league and college players to the Olympic Games. From 1984 through 1996, baseball was deemed a demonstration sport while from 2000 through 2008, it was classified a medal sport. In 1985, Topps included a subset of players who had played on the 1984 Olympic team, the most famous of whom would eventually be Mark McGwire. Thereafter, Topps had special Olympic or USA Baseball subsets to honor players chosen for international competition in 1988, 1991, 1992, and 1993. Cards for players whose rookie cards also identified them as being on the Olympic or national teams were identified by a dichotomous variable (OLYMPIC = 1). We repeat our previous analysis but replace being mentioned in the Mitchell Report with being identified as an Olympic or national team member on Rookie card prices. 3.1. Model and results The general form of our model is the same as earlier except that a dichotomous variable for being on the Olympic or national team replaced the dichotomous variable for being named in the Mitchell Report. See Eq. (1). Our initial specification captures the effect of being identified as a member of the Olympic or national teams,
T.J. Stanton, C.D. Johnson / The Social Science Journal 49 (2012) 214–218 Table 3 Effect of Olympic/National team identification, no ethnicity.
217
Table 4 Effects of ethnicity and Olympic/National team identification.
Term
Estimate
t ratio
Prob > |t|
Term
Estimate
t ratio
Prob > |t|
Intercept AB Hits Doubles Triples HR Walks SB Catch First Second Short Third Post Active Age OLY
1.5662 0.0000 0.0014 −0.0037 −0.0046 0.0023 −0.0001 0.0008 0.1267 0.2505 0.0154 0.1282 −0.0132 0.0061 0.3765 −0.0212 0.5249
3.6591 −0.1587 3.9420 −2.3084 −1.1592 3.4690 −0.2151 1.4915 0.8467 1.6617 0.1074 0.7529 −0.0867 2.2806 2.6645 −1.9835 3.6115
0.0003 0.8740 0.0001 0.0217 0.2474 0.0006 0.8299 0.1370 0.3979 0.0977 0.9145 0.4522 0.9310 0.0233 0.0082 0.0483 0.0004
Intercept AB Hits Doubles Triples HR Walks SB Catch First Second Short Third Post Active Age nonWhiteNoOly WhiteOly nonWhiteOly
1.6178 0.0000 0.0014 −0.0039 −0.0044 0.0023 −0.0001 0.0008 0.0997 0.2364 0.0064 0.1183 −0.0394 0.0063 0.3857 −0.0215 −0.0867 0.4934 0.4936
3.7245 −0.1144 4.0023 −2.4061 −1.1060 3.5420 −0.3589 1.5781 0.6455 1.5525 0.0441 0.6910 −0.2497 2.3501 2.7111 −2.0061 −0.8088 2.7619 2.0454
0.0002 0.9090 0.0001 0.0168 0.2697 0.0005 0.7200 0.1157 0.5191 0.1217 0.9649 0.4902 0.8030 0.0195 0.0071 0.0458 0.4193 0.0061 0.0418
N = 295; R2 = 0.5786; F = 23.86.
regardless of race. Given the small number of pitchers from our data set who are present in the international sub-sets, we analyze hitter data only. Appendix A provides a detailed description of the variables. ln P − ln Pc = ˇ0 + B1 AB + B2 HITS + B3 DOUBLES + B4 TRIPLES + B5 HOMERUNS + B6 WALKS + B7 SB + B8 POSITION + B9 POST + B10 ACTIVE + B11 AGE + B12 OLYMPIC + ε (3) With the exception of the variable OLYMPIC, all other variables are calculated as before. Table 3 presents this initial regression. R-squared is 0.58, and the model is statistically significant at 5%. Performance variables behave as before. Playoff participation is positive and significant. Cards of active players command a higher price while higher ages are associated with lower card price. Of particular relevance for the current study is the variable, OLYMPIC that captures the effect of being portrayed in an Olympic or national team subset. Its coefficient is positive, indicating a premium for Olympians relative to their peers; further, the t ratio is statistically significant at 5%. These results provide evidence that buyers value cards of Olympians more than non-Olympians with similar performance statistics. As was the case with the Mitchell Report, these Olympic results naturally seem to invite analysis of possible differences by ethnicity. Perhaps buyers would find it easy to view a White player as a representative of his country, but would not see nonWhites in the same light. Or perhaps consumers would see it as just the opposite. Or perhaps there is no relationship between ethnicity and patriotism whatsoever. In order to ferret out the connection between perceived patriotism and ethnicity, the regression was repeated with dummy variables to capture four categories of players: White Olympians, Whites who were not Olympians, nonWhite Olympians, and nonWhites who
N = 295; R2 = 0.5796; F = 21.14.
were not Olympians. The results are presented in Table 4. The excluded category is Whites who were not Olympians; hence, all comparisons for the included dummy variables should be to this excluded category. This model is globally significant with results similar to previous tables regarding performance variables. There is no statistically significant difference between the price of nonWhite and White NonOlympians; this is consistent with Table 2 of this paper and with previously published research of others. Additionally, the above results indicate the United States Olympic or National Team is statistically significant for Whites and nonWhites alike. The magnitudes of the coefficients are very close, and both are significant at 5%. This similar treatment for White and nonWhite Olympians contrasts with differential treatment for Whites and nonWhites mentioned in Mitchell. Evidently, buyers place a premium on a reputation enhanced by accomplishments regardless of race, but their pricing of cards for reputations sullied by scandal is influenced by race. 4. Conclusion With the recent release of the Mitchell Report and the ongoing discussion of alleged steroid use in baseball, conversations inevitably turn to differential attitudes toward players mentioned in Mitchell based upon their ethnicity. We analyze this issue to see if there is statistical evidence of such differential treatment. We use 2008 prices of rookie cards for 1980–2003. Employing a model that captures mention in the Mitchell Report regardless of ethnicity, we find evidence of differential card price. Collectors discount the cards of players implicated in Mitchell. However, when the model is modified to isolate the effect of ethnicity among those mentioned in Mitchell, we find that cards of White players are not discounted but those of nonWhite players are. Buyers appear to have a different racial attitude toward negative publicity
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T.J. Stanton, C.D. Johnson / The Social Science Journal 49 (2012) 214–218
Using the same model modified to account for participation on the US Olympic team instead of mention in the Mitchell Report yields differing results. In the model without ethnic variables, collectors place a premium on Olympic cards. The model that accounts for ethnic differences, however, finds that the cards of both Whites and nonWhites receive a premium value. Collectors appear to place a premium on the cards enhanced by achievement regardless of race. Investigating off-field behavior appears to offer a fruitful avenue for future research. A dynamic model that captures prices before and after the Mitchell Report would be an interesting approach. An additional possibility would include player salary as an explanatory variable for card price. With these and undoubtedly other research options, future manuscripts addressing ethnicity in the sports market seem likely. Appendix A. Variable definitions P = April 2008 card price in Beckett Baseball Card Monthly Pc = April 2008 common price for the year the rookie card was issued AB = number of times at bat HITS = total hits DOUBLES = two-base hits TRIPLES = three-base hits HOMERUNS = home runs WALKS = base on balls SB = stolen bases POST = number of post-season games played AGE = player’s age as of 4/1/2008 ACTIVE = 1 if player was active at the start of the 2008 season MITCHELL = 1if player is mentioned in the Mitchell Report WhiteYES = 1 if player is White and is mentioned in the Mitchell Report nonWhiteNO = 1 if player is nonWhite and is mentioned in Mitchell Report nonWhiteYES = 1 if player is nonWhite and is not mentioned in Mitchell WHITENO is the omitted category; White and not mentioned in Mitchell
Olympic = 1 if player was on the US Olympic or national team. WhiteOly = 1 if player is White and a member of the Olympic or national team. nonWhiteOly = 1 if player is nonWhite and a member of the Olympic or national team. nonWhiteNoOly = 1 if player is nonWhite and not a member of the Olympic or national team. WhiteNoOly is the omitted category; White and not a member of the Olympic or national team. Position dummy variables: CATCH = 1 if the player’s primary position was catcher FIRST = 1 if first base SECOND = 1 if second base SHORT = 1 if shortstop THIRD = 1 if third base OFIELD is the omitted category References Beckett, J. (2008). Beckett Baseball Monthly, April. Gabriel, P. E., Johnson, C., & Stanton, T. J. (1995). An examination of customer racial discrimination in the market for baseball memorabilia. Journal of Business, 68, 216–230. Gabriel, P. E., Johnson, C., & Stanton, T. J. (1999). Customer racial discrimination for baseball memorabilia. Applied Economics, 31, 1331–1335. Gillette, G., & Palmer, P. (2008). The ESPN baseball encyclopedia (5th edition). New York: Sterling Publishing Company. Matheson, V. A., & Baade, R. A. (2004). Death effect on collectable prices. Applied Economics, 36, 1151–1155. Nardinelli, C., & Simon, C. (1990). Customer racial discrimination in the market for memorabilia: The case of baseball. Quarterly Journal of Economics, 105, 575–595. Primm, E., Regoli, R. M., & Hewitt, J. D. (2006). Does membership have its rewards? The effects of race and hall of fame membership on football card values. Sociological Spectrum, 26, 369–385. Regoli, R. M., Primm, E., & Hewitt, J. D. (2007). Where ‘o where did my baseball cards go? Race, performance, and placement in the Topps ERA, 1956–1980. Social Science Journal, 44, 742–750. Scahill, E. M. (2005). A reinvestigation of racial discrimination and baseball cards. Eastern Economic Journal, 31, 537–550. Stone, E. W., & Warren, R. S., Jr. (1999). Customer discrimination in professional basketball: Evidence form the trading card market. Applied Economics, 31, 679–695. Wilson, D., & Schmidt, M. S. (2007). Report ties star players to baseball’s steroids era. The New York Times. December 14, A1.
Contents lists available at SciVerse ScienceDirect
The Social Science Journal journal homepage: www.elsevier.com/locate/soscij
Differential customer racial attitudes toward scandal and patriotism: The Mitchell Report, the Olympics, race, and baseball memorabilia Timothy J. Stanton ∗ , Curtis D. Johnson Mount Saint Mary’s University, United States
a r t i c l e
i n f o
Article history: Received 26 August 2010 Received in revised form 29 August 2011 Accepted 19 September 2011 Available online 17 April 2012 Keywords: Customer discrimination Baseball memorabilia Baseball cards Differential treatment
a b s t r a c t This paper investigates differential customer racial reaction to negative and positive publicity related to professional athletes. In terms of negative publicity, it analyzes the effect of mention in the Mitchell Report on the price of baseball cards. In regards to positive publicity, it considers the impact of having been identified as a member of the United States Olympic or national team. After controlling for player productivity with performance statistics, the effects of being mentioned in the Mitchell Report are isolated within regression analysis to draw conclusions concerning customer racial attitudes toward the steroids scandal. Similar analysis is conducted to see the impact of being seen as a baseball representative of the United States. Regression results are consistent with the conclusion that negative publicity devalues the cards of nonWhite players but not of White players. Positive publicity, however, increases the value of a player’s card regardless of ethnicity. © 2011 Western Social Science Association. Published by Elsevier Inc. All rights reserved.
1. Introduction Sports markets have proven to be interesting and fruitful avenues for research into a variety of contemporary issues. The readily available data on market outcomes allows focus on specific topics of interest. One such line of research uses the market for baseball memorabilia to investigate customer racial discrimination against players. In the first instance of this research, Nardinelli and Simon (1990) found that the prices of baseball cards of nonWhite players were less than those of White players of similar statistical productivity, suggesting customer racial discrimination against nonWhite players. Since that groundbreaking article, several others have expanded on the investigation of race and baseball cards. Gabriel, Johnson, and Stanton (1995, 1999) emphasized customer expectations and found mixed results with regards to differential treatment of
∗ Corresponding author at: School of Business, Mount Saint Mary’s University, 16300 Old Emmitsburg Road, Emmitsburg, MD 21727, United States. Tel.: +1 301 447 8300; fax: +1 301 447 5335. E-mail address: [email protected] (T.J. Stanton).
baseball cards of nonWhites, while Scahill (2005) concluded that race was generally not a statistically significant variable in explaining card prices after 1992. Regoli, Primm, and Hewitt (2007) concluded that player performance and not race determined the ranking of cards within the entire card set. Stone and Warren (1999) and Primm, Regoli, and Hewitt (2006) have done similar studies with basketball and football cards, respectively. Less research has been done in regards to how offthe-field events can affect buyer preferences and, as a consequence, card prices. While Matheson and Baade (2004) examined the “death effect” on card prices, little other work has been done in regards to evaluating non-performance events on buyer choices. In this study, we examine two such off-the-field events: scandal (being listed as a user of performance enhancing drugs in the Mitchell Report) and patriotism (being listed as a player on the United States Olympic Team). 2. Scandal Ongoing concerns about differential treatment of players based on ethnicity manifested themselves during the
0362-3319/$ – see front matter © 2011 Western Social Science Association. Published by Elsevier Inc. All rights reserved. doi:10.1016/j.soscij.2011.09.003
T.J. Stanton, C.D. Johnson / The Social Science Journal 49 (2012) 214–218
ongoing steroid abuse scandal in Major League Baseball. Some charged that nonWhite players suspected of steroid use are treated differently than are White players under suspicion. This essay investigates that possibility. Using the Mitchell Report of Major League Baseball, which identified players suspected of steroid use, we posit that the price of baseball cards are determined by player performance statistics and possibly by suspicion of steroid use. We further extend our model to investigate possible price differentials based on ethnicity and steroid use. 2.1. Background Of all the major sports, baseball has arguably been the most scandalized by player use of performance enhancing drugs. While in the 1980s baseball was sullied by player use of recreational drugs, notably cocaine, the 1990s and 2000s saw players using illegal drugs, typically anabolic steroids, to gain a perceived edge in on-field performance. As fans and sports writers watched long-established records fall at what seemed like a yearly pace, some raised questions as to the reason. Were modern players simply better due to enhanced instruction and training? Or were there more sinister reasons for superior performance? Investigative reporters for various news outlets produced evidence of steroid use by certain players, but the extent of such use was unclear. Jose Canseco’s controversial expose, Juiced, charged use by specific players but such allegations were frequently denied. Even player testimony before Congress was ambiguous. To address this issue, Major League Baseball formed a commission to investigate reports of player use of steroids. Headed by former United States Senator George Mitchell, this report was dubbed the Mitchell Report. Released in December of 2007, the report included 89 players alleged to have used performance enhancing drugs (Wilson & Schmidt, 2007). An important question that arises from the release of this report is fan reaction. Do fans have a different attitude toward players implicated in steroid use? Of particular importance for this research, are there racial differences in fan reaction to alleged steroid use? To investigate these issues, we employ the approach first used by Nardinelli and Simon (1990); we posit that market prices for baseball cards capture customer reaction to mention in the Mitchell Report and that we can isolate these effects statistically. Specifically, we use the methodology of Gabriel et al. (1995) which investigated the prices of rookie cards and analyzed Topps rookie cards issued between 1980 and 1994. In this paper, we analyze Topps rookie cards issued between 1980 and 2003, effectively capturing the time period when Mitchell Report players entered the league. The April 2008 issue of Beckett Baseball Card Monthly provides the price information while The ESPN Baseball Encyclopedia (Gillette & Palmer, 2008) provides player performance statistics. 2.2. Model and results The general form of our model is (Gabriel et al., 1995) ln P − ln Pc = ˇX + ε
(1)
215
where P, the price of a card; Pc , the common price of a card; X, a vector of observable player characteristics; B, a vector of parameters; ε = stochastic error with mean 0 and constant variance. The dependent variable is the natural logarithm of the ratio of the card price to the common price, which is the lowest priced card in the set for that year. Player characteristics include performance measures, ethnicity, and mention in the Mitchell Report. Ordinary least squares allow us to estimate the parameters in Eq. (1). Our conclusions about attitudes toward steroid scandal and differential treatment follow from our estimates. Our initial specification captures the effect of being mentioned in the Mitchell Report, regardless of race. Given the small number of pitchers from our data set who are mentioned in the Mitchell Report, we analyze hitter data only. Appendix A provides a detailed description of the variables. ln P − ln Pc = ˇ0 + B1 AB + B2 HITS + B3 DOUBLES + B4 TRIPLES + B5 HOMERUNS + B6 WALKS + B7 SB + B8 POSITION + B9 POST + B10 ACTIVE + B11 AGE + B12 MITCHELL + ε (2)
Besides offensive productivity measures, this model includes dummy variables for position to capture differences in anticipated output based on position played. For example, outfielders generally produce higher offensive numbers than do middle infielders, who more likely play for defensive purposes. The variable POST measures the number of post-season games in which a player participated. ACTIVE is a dichotomous variable to capture if the player was still active in the 2008 season. Of the 295 players in this data set, 80 were still active in 2008. AGE measures the player’s age as of April 1, 2008. MITCHELL indicates whether the player was implicated in the Mitchell Report. A limitation of a dummy variable approach our results concerning Mitchell is that we cannot capture the intensity of suspected steroid use. Some players were implicated in experimenting with steroids once while others were implicated as habitual users. Presumably, card collectors would view the latter group with more disfavor; however, we could not develop an operational, objective measure of intensity. Another possible effect that our model might capture is that card value might actually increase for players implicated in steroid use. After all, players mentioned in Mitchell are a subset of all players; thus, cards of these players are relatively rare. Collectors might value such cards more because of their scarcity. Would Mark McGwire’s rookie card be viewed as more valuable because of the taint of scandal? We conclude that this is a possibility. Alternately, some implicated players have admitted steroid use while others continue to deny using steroids. Collectors might value the admission and contrition of some players mentioned in the Mitchell Report.
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T.J. Stanton, C.D. Johnson / The Social Science Journal 49 (2012) 214–218
Table 1 Effect of Mitchell Report, no ethnicity.
Table 2 Effects of ethnicity and Mitchell Report.
Term
Estimate
t ratio
Prob > |t|
Term
Estimate
t ratio
Prob > |t|
Intercept AB Hits Doubles Triples HR Walks SB Catch First Second Short Third Post Active Age Mitchell
1.9850 0.0000 0.0014 −0.0037 −0.0053 0.0026 0.0001 0.0007 0.1477 0.2148 0.0463 0.1095 0.0204 0.0067 0.2529 −0.0290 −0.4410
4.6792 −0.4222 3.8337 −2.3333 −1.3170 3.8382 0.2851 1.3648 0.9718 1.4063 0.3173 0.6343 0.1325 2.4627 1.7921 −2.7090 −2.2307
0.0000 0.6732 0.0002 0.0203 0.1889 0.0002 0.7758 0.1734 0.3320 0.1608 0.7512 0.5264 0.8947 0.0144 0.0742 0.0072 0.0265
Intercept AB Hits Doubles Triples HR Walks SB Catch First Second Short Third Post Active Age nonWhiteNo WhiteYES nonWhiteYes
2.0392 0.0000 0.0014 −0.0041 −0.0051 0.0027 0.0001 0.0007 0.1079 0.1853 0.0295 0.0952 −0.0265 0.0070 0.2654 −0.0295 −0.0704 −0.3243 −0.7713
4.7420 −0.4017 3.9301 −2.5040 −1.2740 3.9888 0.2791 1.3993 0.6878 1.1973 0.2008 0.5494 −0.1656 2.5696 1.8742 −2.7543 −0.6671 −1.3586 −2.2142
0.0000 0.6882 0.0001 0.0129 0.2037 0.0001 0.7804 0.1629 0.4921 0.2322 0.8410 0.5832 0.8686 0.0107 0.0620 0.0063 0.5053 0.1754 0.0276
N = 295; R2 = 0.5666; F = 22.71.
There is also the real possibility that steroid use does not affect how collectors value cards. Buyers could judge players by their on-field performance and be indifferent on how such players achieved their accomplishments. Table 1 presents this initial regression. R-squared is 0.57, and the model is statistically significant at 5%. Individual results are consistent with previous studies. Hits and home runs are positively correlated with card price. Position dummies are not statistically important. Playoff participation is positive and significant. Cards of active players command a marginally significant higher price while higher ages are associated with lower card price. Of particular relevance for the current study is the variable, MITCHELL, which captures the effect of being mentioned in the Mitchell Report. Its coefficient is negative, suggesting that cards of players associated with steroid use are discounted relative to their peers; further, the t ratio is statistically significant. These results provide evidence consistent with buyers discounting the cards of players implicated in the steroid scandal. Our next specification of the general model captures inclusion in the Mitchell Report and ethnicity. It includes dummy variables to capture four categories of players: Whites who have used steroids, Whites who have not, nonWhites who have, and nonWhites who have not. Table 2 presents these results. The excluded category is Whites who were not implicated in the Mitchell Report; hence, all comparisons for the included dummy variables should be to this excluded category. Results with respect to performance variables are similar to previous estimations. The coefficient on nonWhiteNo is not statistically significant, indicating no differential treatment between White and nonWhite players not implicated by Mitchell. This result further reinforces previous research (Scahill, 2005) that found no differential treatment based on ethnicity in the price of cards. While the coefficient on White players implicated in the Mitchell Report is negative, indicating that collectors discount the card price of such players, this result is not statistically significant. The coefficient on nonWhite players suspected of steroid use is likewise negative; however, it is statistically
N = 295; R2 = 0.5690; F = 20.24.
significant at 5%. Further, the coefficient on the nonWhite variable is twice as large in magnitude as the coefficient on the White variable. These results suggest that collectors discount the card price of nonWhites implicated in the Mitchell Report but do not do so for Whites who were implicated. 3. Patriotism If negative publicity regarding steroid use does not diminish player memorabilia in the eyes of collectors, what impact does positive publicity, such as representing the United States in international competition such as the Olympics, have on player memorabilia? Every four years from 1984 through 2008, the United States sent a team of minor league and college players to the Olympic Games. From 1984 through 1996, baseball was deemed a demonstration sport while from 2000 through 2008, it was classified a medal sport. In 1985, Topps included a subset of players who had played on the 1984 Olympic team, the most famous of whom would eventually be Mark McGwire. Thereafter, Topps had special Olympic or USA Baseball subsets to honor players chosen for international competition in 1988, 1991, 1992, and 1993. Cards for players whose rookie cards also identified them as being on the Olympic or national teams were identified by a dichotomous variable (OLYMPIC = 1). We repeat our previous analysis but replace being mentioned in the Mitchell Report with being identified as an Olympic or national team member on Rookie card prices. 3.1. Model and results The general form of our model is the same as earlier except that a dichotomous variable for being on the Olympic or national team replaced the dichotomous variable for being named in the Mitchell Report. See Eq. (1). Our initial specification captures the effect of being identified as a member of the Olympic or national teams,
T.J. Stanton, C.D. Johnson / The Social Science Journal 49 (2012) 214–218 Table 3 Effect of Olympic/National team identification, no ethnicity.
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Table 4 Effects of ethnicity and Olympic/National team identification.
Term
Estimate
t ratio
Prob > |t|
Term
Estimate
t ratio
Prob > |t|
Intercept AB Hits Doubles Triples HR Walks SB Catch First Second Short Third Post Active Age OLY
1.5662 0.0000 0.0014 −0.0037 −0.0046 0.0023 −0.0001 0.0008 0.1267 0.2505 0.0154 0.1282 −0.0132 0.0061 0.3765 −0.0212 0.5249
3.6591 −0.1587 3.9420 −2.3084 −1.1592 3.4690 −0.2151 1.4915 0.8467 1.6617 0.1074 0.7529 −0.0867 2.2806 2.6645 −1.9835 3.6115
0.0003 0.8740 0.0001 0.0217 0.2474 0.0006 0.8299 0.1370 0.3979 0.0977 0.9145 0.4522 0.9310 0.0233 0.0082 0.0483 0.0004
Intercept AB Hits Doubles Triples HR Walks SB Catch First Second Short Third Post Active Age nonWhiteNoOly WhiteOly nonWhiteOly
1.6178 0.0000 0.0014 −0.0039 −0.0044 0.0023 −0.0001 0.0008 0.0997 0.2364 0.0064 0.1183 −0.0394 0.0063 0.3857 −0.0215 −0.0867 0.4934 0.4936
3.7245 −0.1144 4.0023 −2.4061 −1.1060 3.5420 −0.3589 1.5781 0.6455 1.5525 0.0441 0.6910 −0.2497 2.3501 2.7111 −2.0061 −0.8088 2.7619 2.0454
0.0002 0.9090 0.0001 0.0168 0.2697 0.0005 0.7200 0.1157 0.5191 0.1217 0.9649 0.4902 0.8030 0.0195 0.0071 0.0458 0.4193 0.0061 0.0418
N = 295; R2 = 0.5786; F = 23.86.
regardless of race. Given the small number of pitchers from our data set who are present in the international sub-sets, we analyze hitter data only. Appendix A provides a detailed description of the variables. ln P − ln Pc = ˇ0 + B1 AB + B2 HITS + B3 DOUBLES + B4 TRIPLES + B5 HOMERUNS + B6 WALKS + B7 SB + B8 POSITION + B9 POST + B10 ACTIVE + B11 AGE + B12 OLYMPIC + ε (3) With the exception of the variable OLYMPIC, all other variables are calculated as before. Table 3 presents this initial regression. R-squared is 0.58, and the model is statistically significant at 5%. Performance variables behave as before. Playoff participation is positive and significant. Cards of active players command a higher price while higher ages are associated with lower card price. Of particular relevance for the current study is the variable, OLYMPIC that captures the effect of being portrayed in an Olympic or national team subset. Its coefficient is positive, indicating a premium for Olympians relative to their peers; further, the t ratio is statistically significant at 5%. These results provide evidence that buyers value cards of Olympians more than non-Olympians with similar performance statistics. As was the case with the Mitchell Report, these Olympic results naturally seem to invite analysis of possible differences by ethnicity. Perhaps buyers would find it easy to view a White player as a representative of his country, but would not see nonWhites in the same light. Or perhaps consumers would see it as just the opposite. Or perhaps there is no relationship between ethnicity and patriotism whatsoever. In order to ferret out the connection between perceived patriotism and ethnicity, the regression was repeated with dummy variables to capture four categories of players: White Olympians, Whites who were not Olympians, nonWhite Olympians, and nonWhites who
N = 295; R2 = 0.5796; F = 21.14.
were not Olympians. The results are presented in Table 4. The excluded category is Whites who were not Olympians; hence, all comparisons for the included dummy variables should be to this excluded category. This model is globally significant with results similar to previous tables regarding performance variables. There is no statistically significant difference between the price of nonWhite and White NonOlympians; this is consistent with Table 2 of this paper and with previously published research of others. Additionally, the above results indicate the United States Olympic or National Team is statistically significant for Whites and nonWhites alike. The magnitudes of the coefficients are very close, and both are significant at 5%. This similar treatment for White and nonWhite Olympians contrasts with differential treatment for Whites and nonWhites mentioned in Mitchell. Evidently, buyers place a premium on a reputation enhanced by accomplishments regardless of race, but their pricing of cards for reputations sullied by scandal is influenced by race. 4. Conclusion With the recent release of the Mitchell Report and the ongoing discussion of alleged steroid use in baseball, conversations inevitably turn to differential attitudes toward players mentioned in Mitchell based upon their ethnicity. We analyze this issue to see if there is statistical evidence of such differential treatment. We use 2008 prices of rookie cards for 1980–2003. Employing a model that captures mention in the Mitchell Report regardless of ethnicity, we find evidence of differential card price. Collectors discount the cards of players implicated in Mitchell. However, when the model is modified to isolate the effect of ethnicity among those mentioned in Mitchell, we find that cards of White players are not discounted but those of nonWhite players are. Buyers appear to have a different racial attitude toward negative publicity
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T.J. Stanton, C.D. Johnson / The Social Science Journal 49 (2012) 214–218
Using the same model modified to account for participation on the US Olympic team instead of mention in the Mitchell Report yields differing results. In the model without ethnic variables, collectors place a premium on Olympic cards. The model that accounts for ethnic differences, however, finds that the cards of both Whites and nonWhites receive a premium value. Collectors appear to place a premium on the cards enhanced by achievement regardless of race. Investigating off-field behavior appears to offer a fruitful avenue for future research. A dynamic model that captures prices before and after the Mitchell Report would be an interesting approach. An additional possibility would include player salary as an explanatory variable for card price. With these and undoubtedly other research options, future manuscripts addressing ethnicity in the sports market seem likely. Appendix A. Variable definitions P = April 2008 card price in Beckett Baseball Card Monthly Pc = April 2008 common price for the year the rookie card was issued AB = number of times at bat HITS = total hits DOUBLES = two-base hits TRIPLES = three-base hits HOMERUNS = home runs WALKS = base on balls SB = stolen bases POST = number of post-season games played AGE = player’s age as of 4/1/2008 ACTIVE = 1 if player was active at the start of the 2008 season MITCHELL = 1if player is mentioned in the Mitchell Report WhiteYES = 1 if player is White and is mentioned in the Mitchell Report nonWhiteNO = 1 if player is nonWhite and is mentioned in Mitchell Report nonWhiteYES = 1 if player is nonWhite and is not mentioned in Mitchell WHITENO is the omitted category; White and not mentioned in Mitchell
Olympic = 1 if player was on the US Olympic or national team. WhiteOly = 1 if player is White and a member of the Olympic or national team. nonWhiteOly = 1 if player is nonWhite and a member of the Olympic or national team. nonWhiteNoOly = 1 if player is nonWhite and not a member of the Olympic or national team. WhiteNoOly is the omitted category; White and not a member of the Olympic or national team. Position dummy variables: CATCH = 1 if the player’s primary position was catcher FIRST = 1 if first base SECOND = 1 if second base SHORT = 1 if shortstop THIRD = 1 if third base OFIELD is the omitted category References Beckett, J. (2008). Beckett Baseball Monthly, April. Gabriel, P. E., Johnson, C., & Stanton, T. J. (1995). An examination of customer racial discrimination in the market for baseball memorabilia. Journal of Business, 68, 216–230. Gabriel, P. E., Johnson, C., & Stanton, T. J. (1999). Customer racial discrimination for baseball memorabilia. Applied Economics, 31, 1331–1335. Gillette, G., & Palmer, P. (2008). The ESPN baseball encyclopedia (5th edition). New York: Sterling Publishing Company. Matheson, V. A., & Baade, R. A. (2004). Death effect on collectable prices. Applied Economics, 36, 1151–1155. Nardinelli, C., & Simon, C. (1990). Customer racial discrimination in the market for memorabilia: The case of baseball. Quarterly Journal of Economics, 105, 575–595. Primm, E., Regoli, R. M., & Hewitt, J. D. (2006). Does membership have its rewards? The effects of race and hall of fame membership on football card values. Sociological Spectrum, 26, 369–385. Regoli, R. M., Primm, E., & Hewitt, J. D. (2007). Where ‘o where did my baseball cards go? Race, performance, and placement in the Topps ERA, 1956–1980. Social Science Journal, 44, 742–750. Scahill, E. M. (2005). A reinvestigation of racial discrimination and baseball cards. Eastern Economic Journal, 31, 537–550. Stone, E. W., & Warren, R. S., Jr. (1999). Customer discrimination in professional basketball: Evidence form the trading card market. Applied Economics, 31, 679–695. Wilson, D., & Schmidt, M. S. (2007). Report ties star players to baseball’s steroids era. The New York Times. December 14, A1.