A Note on the Local Economic Impact of Sports Expenditures
AbstractPublic subsidies for sports stadiums and arenas are often justified as a means to boost the local economy. The argument relies on historical local economic impact multipliers that misrepresent the effect of consumer expenditures on professional sports. Sports expenditures are subject to extraordinary consumer substitution away from other local expenditures, and they suffer unusually large first round leakages from the local economy because, inter alia, players export their earnings to the locale of their permanent residence. This note illustrates the extent of such leakages using information about the permanent residence of players in the National Basketball Association. While 93% of average employees live in the area where they work, only 29% of NBA players do the same. The illustration shows that a standard local economic impact multiplier exaggerates the stimulative effect of sports expenditures by over 400%.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by in its journal Journal of Sports Economics.
Volume (Year): 3 (2002)
Issue (Month): 4 (November)
Contact details of provider:
Find related papers by JEL classification:
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
- R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Georgios Kavetsos & Stefan Szymanski, 2008.
"National Wellbeing and International Sports Events,"
0804, International Association of Sports Economists & North American Association of Sports Economists.
- Kavetsos, Georgios & Szymanski, Stefan, 2010. "National well-being and international sports events," Journal of Economic Psychology, Elsevier, vol. 31(2), pages 158-171, April.
- Robert Baade & Victor Matheson, 2011.
"An Evaluation of the Economic Impact of National Football League Mega-events,"
1112, College of the Holy Cross, Department of Economics.
- Robert Baade & Victor Matheson, 2011. "An Evaluation of the Economic Impact of National Football League Mega-events," Working Papers 1119, International Association of Sports Economists & North American Association of Sports Economists.
- Lasse Steiner & Bruno S. Frey & Simone Hotz, 2013.
"European Capitals of Culture and Life Satisfaction,"
CREMA Working Paper Series
2013-07, Center for Research in Economics, Management and the Arts (CREMA).
- Lasse Steiner & Bruno S. Frey & Simone Hotz, 2013. "European capitals of culture and life satisfaction," ECON - Working Papers 117, Department of Economics - University of Zurich.
- Robert A. Baade & Victor A. Matheson, 2007.
"Professional Sports, Hurricane Katrina, And The Economic Redevelopment Of New Orleans,"
Contemporary Economic Policy,
Western Economic Association International, vol. 25(4), pages 591-603, October.
- Baade, Robert A. & Matheson, Victor A., 2012. "Professional sports, hurricane Katrina, and the economic redevelopment of New Orleans," Edition HWWI: Chapters, in: Zur Ökonomik von Spitzenleistungen im internationalen Sport, pages 123-146 Hamburg Institute of International Economics (HWWI).
- Rhodes, M. Taylor, 2013. "Pigskin, Tailgating and Pollution: Estimating the Environmental Impacts of Sporting Events," Working Papers 13-19, University of North Carolina at Greensboro, Department of Economics.
- Michael Sam & Jay Scherer, 2006. "The Steering Group as Policy Advice Instrument: A Case of â€œConsultocracyâ€\x9D in Stadium Subsidy Deliberations," Policy Sciences, Springer, vol. 39(2), pages 169-181, June.
- Victor Matheson & Robert Baade, 2004. "Padding Required: Assessing the Economic Impact of the Super Bowl," Working Papers 0403, College of the Holy Cross, Department of Economics.
- Bernard F. Lentz & David N. Laband, 2008. "The Impact of College Athletics on Employment in the Restaurant and Accommodations Industries," Working Papers 0803, International Association of Sports Economists & North American Association of Sports Economists.
- Agha, Nola & Rascher, Daniel, 2013. "When can economic impact be positive? Nine conditions that explain why smaller sports can have bigger impacts," MPRA Paper 48016, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SAGE Publications).
If references are entirely missing, you can add them using this form.