Estimating Local Welfare Generated by an NFL Team under Credible Threat of Relocation
AbstractThis study offers the opportunity to examine the welfare contribution of the Minnesota Vikings to Minnesota households in the context of a credible threat of team relocation. We find the credibility of the threat of relocation is essential to providing unbiased estimates of welfare. This study utilizes contingent valuation methodology (CVM) and a random utility model (RUM) to analyze Minnesotans’ decision-making mechanisms for supporting a new stadium initiative. While previous studies have attempted to measure the welfare associated with a sports franchise, we develop and discuss bias that may be imparted to estimates when the researcher fails to calculate a ‘‘choke price.’’ Further, we develop an unbiased approach to identify welfare when respondents perceive a risk of losing the franchise. The range of welfare contribution by the Vikings to households in Minnesota is $445.3 million to $1,571.3 million according to a 95% confidence interval based on our study.
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Bibliographic InfoArticle provided by Southern Economic Association in its journal Southern Economic Journal.
Volume (Year): 76 (2009)
Issue (Month): 1 (July)
Find related papers by JEL classification:
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- The Intangible Benefits of the Vikings and the Relocation Threat Credibility
by Phil Miller in Market Power on 2010-01-19 17:55:03
- Humphreys, Brad & Johnson, Bruce & Mason, Daniel & Whitehead, John, 2011.
"Estimating the Value of Medal Success at the 2010 Winter Olympic Games,"
2011-20, University of Alberta, Department of Economics.
- Brad R. Humphreys & Bruce K. Johnson & Daniel S. Mason & John C. Whitehead, 2011. "Estimating the Value of Medal Success at the 2010 Winter Olympic Games," Working Papers 11-20, Department of Economics, Appalachian State University.
- Huang, Haifang & Humphreys, Brad, 2012. "Do New Sports Facilities Revitalize Urban Neighborhoods? Evidence from Residential Mortgage Applications," Working Papers 2012-5, University of Alberta, Department of Economics.
- Humphreys, Brad & Zhou, Li, 2014. "Loss Aversion, Team Relocations, and Major League Expansion," Working Papers 2014-3, University of Alberta, Department of Economics.
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