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The Effect of Professional Sports on the Earnings of Individuals: Evidence from Microeconomic Data

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  • Dennis Coates

    ()

  • Brad R. Humphreys

    ()

Abstract

This paper explores the impact of professional sports teams and stadiums on the wages of individuals employed in several narrowly defined occupational groups in cities in the United States. The occupational groups examined are among those that proponents of public funding of professional sports claim will benefit economically from these stadiums. Our analysis uses data from the March Supplement to the Current Population Survey (CPS) for the period 1977 to 1998 as well as sports variables previously utilized by Coates and Humphreys (1999), (2001). Previous research focused on aggregate measures of income whereas here the focus is on the wages of individual workers. The results of the study confirm conclusions of earlier research that the overall sports environment is frequently statistically significant as a determinant of earnings and that the predicted mean impact of sports on wages in a sample of individuals employed in occupations closely related to professional sports is an annual average decrease in real earnings of $47.95. The results also show that the effects of the sports environment on wages differ across job-types. Workers in retail occupations earn more on average each year due to the presence of professional sports while workers in other peripherally related occupations like food services and hotels earn less.

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Bibliographic Info

Paper provided by UMBC Department of Economics in its series UMBC Economics Department Working Papers with number 03-104.

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Length: 16 pages
Date of creation: Sep 2003
Date of revision:
Handle: RePEc:umb:econwp:03104

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Keywords: Local Economic Development; Professional Sports; Current Population Survey;

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References

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  1. Gerald Carlino & N. Edward Coulson, 2002. "Compensating differentials and the social benefits of the NFL," Working Papers 02-12, Federal Reserve Bank of Philadelphia.
  2. Coates, Dennis & Humphreys, Brad R., 2003. "The effect of professional sports on earnings and employment in the services and retail sectors in US cities," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 33(2), pages 175-198, March.
  3. Topel, Robert H, 1986. "Local Labor Markets," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 94(3), pages S111-43, June.
  4. John J. Siegfried & Andrew Zimbalist, 2000. "The Economics of Sports Facilities and Their Communities," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 14(3), pages 95-114, Summer.
  5. Dennis Coates & Brad R. Humphreys, 2001. "The Economic Consequences of Professional Sports Strikes and Lockouts," Southern Economic Journal, Southern Economic Association, vol. 67(3), pages 737-747, January.
  6. 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., John Wiley & Sons, Ltd., vol. 18(4), pages 601-624.
  7. Murphy, Kevin M & Welch, Finis, 1992. "The Structure of Wages," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 107(1), pages 285-326, February.
  8. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May.
  9. Jeffrey M. Wooldridge, 2003. "Cluster-Sample Methods in Applied Econometrics," American Economic Review, American Economic Association, American Economic Association, vol. 93(2), pages 133-138, May.
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Cited by:
  1. Lasse Steiner & Bruno S. Frey & Simone Hotz, 2013. "European Capitals of Culture and Life Satisfaction," CREMA Working Paper Series, Center for Research in Economics, Management and the Arts (CREMA) 2013-07, Center for Research in Economics, Management and the Arts (CREMA).
  2. Kavetsos, Georgios & Szymanski, Stefan, 2010. "National well-being and international sports events," Journal of Economic Psychology, Elsevier, Elsevier, vol. 31(2), pages 158-171, April.

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