The study examines the question why some members utilitze their fitness club membership only little. This behaviour seems to be odd under microeconomic theory assuming human beings to maximize profits. An estimated 30% of fitness club members in Germany utilize their membership rarely but still do not intend to cancel despite ongoing monthly fees. In order to answer the question of the thesis, utility functions are employed embedding not only traditional economic factors such as money and time but also variables from social sciences, particularly from motivation theory and sport science. Further, recent findings from flat rate effects are elaborated whether to have an impact on non-attendance behaviour.
The work adds to a young field in economics, namely to behavioural economics. Economic studies so far predominantly examined on consumption behaviour and the quantity thereof but not on possible utility of non-consumption behaviour.
The examination is not only interesting from a theoretical perspective, it also gives practical implications and recommendations to fitness club managers and fitness club consumers. Having insight into determinants of non-consumption behaviour might help fitness club managers to identify customers who attend infrequently but pay regular fees. In this, fitness club managers can implement successful acquisition and relationship management strategies. On the other hand, fitness club consumers can derive conclusions from the study in order to become aware of their behaviour and to possibly behave more cost-efficiently in the future.
Table of Contents
1. INTRODUCTION
1.1. Problem Definition
1.2. The Problem’s Topicality and Significance
1.3. Structure of the Thesis
2. STATE-OF-THE-ART - Empirical Findings
2.1. Utility and Costs of Attendance
2.1.1. Monetary
2.1.2. Social/ Motivation
2.1.3. Motivation
2.2. Extra Utility
2.3. SUMMARY
3. THEORY
3.1. PART I - Analysis of Supply and Demand of Gym Attendance
3.1.1. Analysis of Demand: Why People become Members of Commercial Fitness Clubs
3.1.1.1. Changes in Income and Work Time
3.1.1.2. Changes in Social Values
3.1.1.3. Body Concept
3.1.1.4. SUMMARY
3.1.2. Analysis of Supply of Gym Attendance - Constraints to Attendance in Commercial Fitness Clubs
3.1.2.1. Definition of Commercial Fitness Clubs
3.1.2.2. Characteristics of Commercial Fitness Clubs
3.1.3. Interim Conclusion
3.1.3.1. Characteristics of Membership Fees and Definition of Infrequent Attendees
3.1.3.2. Willingness-to-pay Function
3.2. PART II – Analysis of Utility
3.2.1. Becker – Household Production Function – how often a member is willing to attend
3.2.2. Utility Theory
3.2.3. Expected Utility Theory
4. THE MODEL
4.1. Identification of Utility of Attendance, Costs of Attendance and Extra Utility
4.1.1. Identification of Utility and Costs of Attendance
4.1.1.1. Monetary Costs
4.1.1.2. Time Costs
4.1.1.3. Social Utility and Costs
4.1.1.4. Motivation Utility and Costs
4.1.2. The Attendance-Cycle Model
4.1.3. Identification of Extra Utility
4.1.3.1. Insurance Effect and Loss Aversion
4.1.3.2. Convenience Effect
4.1.3.3. Taxi Meter Effect
4.1.3.4. Cognitive Dissonance and Divesture Aversion
4.1.3.5. Endowment Effect
4.1.3.6. Option Value
4.1.4. Interim Conclusion
5. HYPOTHESES
5.1. To Hypothesis 1: (Expected) Gross UTILITY of Attendance
5.2. To Hypothesis 2: (Expected) COSTS of Attendance
5.3. To Hypothesis 3: Extra UTILITY
6. METHODOLOGY
6.1. Web Survey - Advantages and Disadvantages
6.2. Questionnaire and Pre-Tests
6.3. Data Collection and Participation
6.4. Data Selection
6.5. Procedure of Data Analysis
7. DATA ANALYSIS
7.1. Description of the Sample
7.1.1. Dependent Variable – Attendance Frequency
7.1.2. Independent Variables – Utility and Cost of Attendance
7.1.2.1. Monetary Costs
7.1.2.2. Time Costs
7.1.2.3. Social Utility and Social Costs
7.1.2.4. Motivation Utility and Motivation Costs
7.1.3. SUMMARY
7.1.4. Independent Variables – Extra Utility
7.1.4.1. Reliability Analysis – Insurance Effect
7.1.4.2. Reliability Analysis – Taximeter Effect
7.1.4.3. Reliability Analysis – Convenience Effect
7.1.4.4. Reliability Analysis – Cognitive Dissonance
7.1.4.5. Reliability Analysis – Endowment Effect
7.1.4.6. Reliability Analysis – Option Value
7.1.5. SUMMARY
7.2. Measuring Bivariate Correlations – Dependent with Independent Variables
7.3. Regression Analysis – All Attendees
7.3.1. Testing the Relationship between Attendance Frequency and the Independent Variables
7.3.2. The Coefficient of Determination: R-Square and Adjusted R-Square
7.3.3. SUMMARY
7.4. Comparative Analysis – Infrequent vs. Frequent Attendees
7.4.1. SUMMARY
7.5. Regression Analysis – Infrequent Attendees
7.5.1. The Coefficient of Determination: R-Square and Adjusted R-Square
7.5.2. Analyzing the F-Statistic Score
7.5.3. Test for Multicollinearity
7.5.4. Significance of Individual Variables
7.5.5. Explaining the Results of the Regression for the Hypothesized Signs of the Coefficients
7.5.6. SUMMARY
8. INTERPRETATION OF RESULTS
8.1. (Expected) Utility and Costs of Attendance
8.1.1. Monetary Costs
8.1.2. Time Costs
8.1.3. Social Utility and Social Costs
8.1.4. Motivation Utility and Motivation Costs
8.2. Extra Utility
8.3. SUMMARY
9. CONCLUSION & OUTLOOK
10. BIBLIOGRAPHY
11. APPENDIX
Objective & Core Themes
This dissertation aims to explore the phenomenon of low attendance among members of commercial fitness clubs despite the presence of ongoing membership fees. By integrating microeconomic utility theory with insights from the social sciences, the work seeks to develop a model that explains why consumers underutilize their memberships and identifies the key determinants of attendance frequency.
- Behavioral economics and sport consumer behavior
- Utility theory and the Becker Household Production Function
- Impact of social and motivational factors on gym attendance
- Role of flat rate pricing structures and extra utility in member loyalty
- Comparative analysis of infrequent versus frequent fitness club attendees
Excerpt from the Book
1. INTRODUCTION
According to Deloitte (2011), by the end of 2010 a total of 7.31 m persons owned a membership card of a commercial fitness club in Germany. Although members pay on average € 46.90 per month for their membership (DSSV, 2010), it occurs that the price often lies above the actual utilization (Malmendier & Della Vigna, 2006). According to observations of fitness club managers, an estimated 30% of their customers attend only infrequently. Since under economic theory human beings are assumed to make rational decisions, it could be that people overestimate their future attendance when signing up (Stingel, 2007). Since most members are constrained by contract conditions where cancellation is only possible after one year, one would assume members who utilize their membership only little regret to have signed up because costs of membership outweigh benefits. However, it happens that members still do not cancel. Since the effort to cancel membership is rather little, the transaction cost theorem cannot hold to explain this behaviour (Malmendier & Della Vigna, 2006).
Moreover, the high number of members – 8.9% of the German population are commercial fitness club members (Deloitte, 2011) - comes as a surprise under profit maximization principles since for everything that is being offered in a commercial gym, there is a cheaper or even costless alternative - in monetary terms. Just to name a few: if “Health” is the driver to become a member of a fitness club, one could likewise just go running or biking. If “Meeting People” is the main determinant, one could surf the internet for contacts. If “Better Looks” motivates members to sign up, one could do sit-ups at home, get fresh air and take care of nutrition.
Summary of Chapters
1. INTRODUCTION: Outlines the problem of low gym attendance despite ongoing costs and sets the central research question.
2. STATE-OF-THE-ART - Empirical Findings: Reviews existing empirical studies on the utility, costs, and psychological factors influencing sports participation.
3. THEORY: Analyzes the supply and demand factors for fitness memberships and examines utility theories and Becker's household production function.
4. THE MODEL: Identifies various forms of utility and cost, including extra utility factors, to build an attendance-cycle model.
5. HYPOTHESES: Formulates testable hypotheses based on utility and cost determinants regarding attendance frequency.
6. METHODOLOGY: Describes the design, data collection via web survey, and the approach to quantitative data analysis.
7. DATA ANALYSIS: Provides a comprehensive examination of the sample, reliability tests, and regression models for all and infrequent attendees.
8. INTERPRETATION OF RESULTS: Discusses the regression outcomes, specifically focusing on the influence of social and motivational variables on attendance.
9. CONCLUSION & OUTLOOK: Synthesizes the main findings and provides practical recommendations for fitness club managers and consumers.
Keywords
Fitness club, Sport consumer behavior, Utility theory, Attendance frequency, Behavioral economics, Flat rate, Becker household production function, Social utility, Motivation, Underutilization, Regression analysis, Empirical study, Consumer surplus, Extra utility, Membership retention
Frequently Asked Questions
What is the primary focus of this dissertation?
The work investigates the socio-economic reasons why many members of commercial fitness clubs pay for monthly memberships but use the facilities only infrequently.
Which key topics are covered in this research?
The research covers behavioral economics, utility theory, the role of social and motivational factors, and the specific impact of flat-rate membership contracts on consumer behavior.
What is the central research question?
The core research question is: "Why do some members of commercial fitness clubs utilize their membership only little?"
What scientific methods were employed?
The author conducted a quantitative study using an online web survey, followed by descriptive statistical analysis, reliability testing, and log-linear regression analysis.
What does the main body of the work address?
The main part of the thesis builds a theoretical model identifying utility and cost determinants, proposes hypotheses, and tests these through data collected from fitness club members.
Which keywords best characterize this work?
Key terms include sport consumer behavior, attendance frequency, utility theory, behavioral economics, and underutilization.
Why do infrequent attendees not cancel their memberships?
The analysis suggests that social barriers, the need to avoid cognitive dissonance regarding health goals, and the perceived value of having the option to attend prevent members from cancelling.
What role does social utility play in gym attendance?
Social utility, such as familiarity with the gym and relationships with trainers and co-members, is identified as a major driver that can paradoxically lead to retaining a membership even with low attendance.
- Arbeit zitieren
- Maren Mueller (Autor:in), 2012, A Socio-Economic Analysis of Attendance Behaviour in Commercial Fitness Clubs, München, GRIN Verlag, https://www.grin.com/document/197829
