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Public Funding of Professional Sports Stadiums: Public Choice or Civic Pride?

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  • Peter A. Groothuis
  • Bruce K. Johnson
  • John C. Whitehead

Abstract

Many state and local governments have subsidized the construction of arenas and stadiums for the use of professional sports teams. They often justify the subsidies with claims that the stadiums generate positive externalities, including public goods. Some research using Contingent Valuation Method surveys has shown that such public goods may be valuable, but no published research has yet found a case in which the value of the public goods alone could justify public construction of a new stadium or arena. This suggests that the public choice argument for public subsidy of sports may play a role. This paper uses a bivariate probit model to extend the analysis of data from a previous study to show that, while public goods may contribute to a community's willingness to subsidize sports, public choice factors also play a role. The analysis clarifies the genesis of civic pride and its relationship to sports and other cultural amenities in a city.
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Suggested Citation

  • Peter A. Groothuis & Bruce K. Johnson & John C. Whitehead, 2002. "Public Funding of Professional Sports Stadiums: Public Choice or Civic Pride?," Working Papers 02-09, Department of Economics, Appalachian State University.
    • Handle: RePEc:apl:wpaper:02-09
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    References listed on IDEAS

    as
    1. John J. Siegfried & Andrew Zimbalist, 2000. "The Economics of Sports Facilities and Their Communities," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 95-114, Summer.
    2. Bruce K. Johnson & Peter A. Groothuis & John C. Whitehead, 2001. "The Value of Public Goods Generated by a Major League Sports Team," Journal of Sports Economics, , vol. 2(1), pages 6-21, February.
    3. Richard T. Carson, 2011. "Contingent Valuation," Books, Edward Elgar Publishing, number 2489.
    4. Dennis Coates & Brad R. Humphreys, 1999. "The growth effects of sport franchises, stadia, and arenas," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 18(4), pages 601-624.
    5. Whitehead, John C. & Groothuis, Peter A. & Blomquist, Glenn C., 1993. "Testing for non-response and sample selection bias in contingent valuation : Analysis of a combination phone/mail survey," Economics Letters, Elsevier, vol. 41(2), pages 215-220.
    6. BK. Johnson & JC. Whitehead, 2000. "Value of public goods from sports stadiums: the CVM approach," Contemporary Economic Policy, Western Economic Association International, vol. 18(1), pages 48-58, January.
    7. Bruce K. Johnson & Peter A. Groothuis & John C. Whitehead, 2000. "“The Value of Public Goods Generated by a Major League Sports Team: The CVM Approach,”," Working Papers 0014, East Carolina University, Department of Economics.
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    Citations

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    Cited by:

    1. John K. Wilson & Richard Pomfret, 2009. "Government Subsidies for Professional Team Sports in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 42(3), pages 264-275, September.
    2. Gabriel M. Ahlfeldt & Wolfgang Maennig & Michaela …lschläger, 2012. "Support For and Resistance Against Large Stadiums: The Role of Lifestyle and Other Socio-economic Factors," Chapters, in: Wolfgang Maennig & Andrew Zimbalist (ed.), International Handbook on the Economics of Mega Sporting Events, chapter 7, Edward Elgar Publishing.
    3. Pete Groothuis & Kurt W. Rotthoff, 2014. "Surveying the Literature and the People: The Economic Impact of Sports Teams and Civic Pride," Working Papers 14-05, Department of Economics, Appalachian State University.
    4. Hyunwoong Pyun & Joshua C. Hall, 2019. "Does the presence of professional football cause crime in a city? Evidence from Pontiac, Michigan," Applied Economics, Taylor & Francis Journals, vol. 51(36), pages 3958-3970, August.
    5. Robert W. Baumann & Victor A. Matheson & Chihiro Muroi, 2009. "Bowling in Hawaii," Journal of Sports Economics, , vol. 10(1), pages 107-123, February.
    6. Robert Baumann & Victor Matheson & Chihiro Muroi, 2008. "Bowling in Hawaii: Examining the Effectiveness of Sports-Based Tourism Strategies," Working Papers 0808, College of the Holy Cross, Department of Economics.
    7. Seth R. Gitter & Thomas A. Rhoads, 2014. "Stadium Construction And Minor League Baseball Attendance," Contemporary Economic Policy, Western Economic Association International, vol. 32(1), pages 144-154, January.
    8. Dennis Coates & Victor Matheson, 2011. "Mega-events and housing costs: raising the rent while raising the roof?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(1), pages 119-137, February.
    9. Geoffrey Propheter & Megan E. Hatch, 2015. "Evaluating Parking Monetization as a Strategy for Subsidizing Major League Sports Facilities," Growth and Change, Wiley Blackwell, vol. 46(1), pages 1-15, March.
    10. Christina Philippou, 2019. "Towards a unified framework for anti-bribery in sport governance," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 16(2), pages 83-99, July.
    11. Andy Vekeman & Michel Meulders & Alain Praet & Jan Colpaert & Tom Van Puyenbroeck, 2015. "Contingent Valuation of a Classic Cycling Race," Journal of Sports Economics, , vol. 16(3), pages 268-294, April.
    12. Kim, Woosoon & Walker, Matthew, 2012. "Measuring the social impacts associated with Super Bowl XLIII: Preliminary development of a psychic income scale," Sport Management Review, Elsevier, vol. 15(1), pages 91-108.
    13. Pablo Castellanos & Jaume García & José Manuel Sánchez, 2011. "The Willingness to Pay to Keep a Football Club in a City: How Important are the Methodological Issues?," Journal of Sports Economics, , vol. 12(4), pages 464-486, August.
    14. Robert W. Wassmer & Ryan S. Ong & Geoffrey Propheter, 2016. "Suggestions for the Needed Standardization of Determining the Local Economic Impact of Professional Sports," Economic Development Quarterly, , vol. 30(3), pages 252-266, August.
    15. Warziniack, Travis, 2010. "Efficiency of public goods provision in space," Ecological Economics, Elsevier, vol. 69(8), pages 1723-1730, June.
    16. Hyunwoong Pyun, 2019. "Exploring causal relationship between Major League Baseball games and crime: a synthetic control analysis," Empirical Economics, Springer, vol. 57(1), pages 365-383, July.
    17. Bruce K. Johnson & John C. Whitehead & Daniel S. Mason & Gordon J. Walker, 2012. "Willingness to Pay for Downtown Public Goods Generated by Large, Sports-Anchored Development Projects: The CVM Approach," Working Papers 12-01, Department of Economics, Appalachian State University.
    18. Dennis Coates & Victor Matheson, 2009. "Mega-Events and Housing Costs: Raising the Rent while Raising the Roof?," Working Papers 0903, College of the Holy Cross, Department of Economics.
    19. Dongwoo Hyun, 2022. "Proud of, but too close: the negative externalities of a new sports stadium in an urban residential area," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 68(3), pages 615-633, June.
    20. Gabriel Ahlfeldt & Wolfgang Maennig & Michaela Ölschläger, 2009. "Lifestyles and Preferences for (Public) Goods: Professional Football in Munich," Working Papers 030, Chair for Economic Policy, University of Hamburg.
    21. Krystian Zawadzki, 2015. "Estimation Of The Willingness-To-Pay For Preserving The Football Arena In Gdansk," "e-Finanse", University of Information Technology and Management, Institute of Financial Research and Analysis, vol. 11(1), pages 44-55, August.
    22. Jagoda Adamus, 2023. "How Much Are Public Spaces Worth? Non-Market Valuation Methods in Valuing Public Spaces," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 2, pages 66-89.
    23. Chen-Yueh Chen & Yi-Hsiu Lin, 2021. "Psychic Income and Intention to Attend Games, Intention to Purchase Licensed Merchandise, and Life Satisfaction: 2017 Taipei Universiade," SAGE Open, , vol. 11(2), pages 21582440211, June.
    24. Peter A. Groothuis & Kurt W. Rotthoff, 2016. "The Economic Impact and Civic Pride Effects of Sports Teams and Mega-Events: Do The Public and the Professionals Agree?," Economic Affairs, Wiley Blackwell, vol. 36(1), pages 21-32, February.

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    More about this item

    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

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