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A Note on the Local Economic Impact of Sports Expenditures

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Author Info

  • John Siegfried

    (Vanderbilt University)

  • Andrew Zimbalist

    (Smith College)

Abstract

Public 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%.

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Bibliographic Info

Article provided by in its journal Journal of Sports Economics.

Volume (Year): 3 (2002)
Issue (Month): 4 (November)
Pages: 361-366

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Handle: RePEc:sae:jospec:v:3:y:2002:i:4:p:361-366

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Related research

Keywords: Arena; Sports; Stadiums;

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Cited by:
  1. 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).
  2. 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.
  3. Yamamura, Eiji, 2014. "Identity, Nostalgia and Happiness among Migrants: The Case of the Kōshien High School Baseball Tournament in Japan," MPRA Paper 53776, University Library of Munich, Germany.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. Michael Sam & Jay Scherer, 2006. "The Steering Group as Policy Advice Instrument: A Case of “Consultocracyâ€\x9D in Stadium Subsidy Deliberations," Policy Sciences, Springer, vol. 39(2), pages 169-181, June.
  9. Georgios Kavetsos & Stefan Szymanski, 2008. "National Wellbeing and International Sports Events," Working Papers 0804, International Association of Sports Economists & North American Association of Sports Economists.
  10. 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.

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