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Do Economists Reach a Conclusion on Subsidies for Sports Franchises, Stadiums, and Mega-Events?

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Listed:
  • Dennis Coates
  • Brad R. Humphreys

Abstract

This paper reviews the empirical literature assessing the effects of subsidies for professional sports franchises and facilities. The evidence reveals a great deal of consistency among economists doing research in this area. That evidence is that sports subsidies cannot be justified on the grounds of local economic development, income growth or job creation, those arguments most frequently used by subsidy advocates. The paper also relates survey evidence showing that economists in general oppose sports subsidies. In addition to reviewing the empirical literature, we describe the economic intuition that probably underlies the strong consensus among economists against sports subsidies.

Suggested Citation

  • Dennis Coates & Brad R. Humphreys, 2008. "Do Economists Reach a Conclusion on Subsidies for Sports Franchises, Stadiums, and Mega-Events?," Econ Journal Watch, Econ Journal Watch, vol. 5(3), pages 294-315, September.
    • Handle: RePEc:ejw:journl:v:5:y:2008:i:3:p:294-315
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    References listed on IDEAS

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    1. Arthur C. Nelson, 2001. "Prosperity or Blight? A Question of Major League Stadia Locations," Economic Development Quarterly, , vol. 15(3), pages 255-265, August.
    2. Robert W. Wassmer, 2001. "Metropolitan Prosperity from Major League Sports in the CBD: Stadia Locations or Just Strength of the Central City? A Reply to Arthur C. Nelson," Economic Development Quarterly, , vol. 15(3), pages 266-271, August.
    3. Victor A. Matheson, 2005. "Contrary Evidence on the Economic Effect of the Super Bowl on the Victorious City," Journal of Sports Economics, , vol. 6(4), pages 420-428, November.
    4. Robert Baade & Victor Matheson, 2004. "The Quest for the Cup: Assessing the Economic Impact of the World Cup," Regional Studies, Taylor & Francis Journals, vol. 38(4), pages 343-354.
    5. Dennis Coates & Brad R. Humphreys, 2001. "The Economic Consequences of Professional Sports Strikes and Lockouts," Southern Economic Journal, John Wiley & Sons, 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., vol. 18(4), pages 601-624.
    7. repec:bla:ausecr:v:39:y:2006:i:4:p:420-427 is not listed on IDEAS
    8. Robert Baade & Robert Baumann & Victor Matheson, 2005. "Selling the Big Game: Estimating the Economic Impact of Mega-Events through Taxable Sales," Working Papers 0510, College of the Holy Cross, Department of Economics.
    9. Dennis Coates & Craig A. Depken, II, 2006. "Mega-Events: Is the Texas-Baylor game to Waco what the Super Bowl is to Houston?," Working Papers 0606, International Association of Sports Economists;North American Association of Sports Economists.
    10. Robert A. Baade & Robert Baumann & Victor A. Matheson, 2008. "Selling the Game: Estimating the Economic Impact of Professional Sports through Taxable Sales," Southern Economic Journal, John Wiley & Sons, vol. 74(3), pages 794-810, January.
    11. Kaveephong Lertwachara & James J. Cochran, 2007. "An Event Study of the Economic Impact of Professional Sport Franchises on Local U.S. Economies," Journal of Sports Economics, , vol. 8(3), pages 244-254, June.
    12. Michael C. Davis & Christian M. End, 2010. "A Winning Proposition: The Economic Impact Of Successful National Football League Franchises," Economic Inquiry, Western Economic Association International, vol. 48(1), pages 39-50, January.
    13. 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.
    14. Editorial Article, 0. "Contents," Economics of Contemporary Russia, Regional Public Organization for Assistance to the Development of Institutions of the Department of Economics of the Russian Academy of Sciences, issue 3.
    15. Marc Lavoie & Gabriel Rodríguez, 2005. "The Economic Impact of Professional Teams on Monthly Hotel Occupancy Rates of Canadian Cities," Journal of Sports Economics, , vol. 6(3), pages 314-324, August.
    16. 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, vol. 33(2), pages 175-198, March.
    17. Baade, Robert A & Dye, Richard F, 1988. "An Analysis of the Economic Rationale for Public Subsidization of Sports Stadiums," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 22(2), pages 37-47, July.
    18. Dennis Coates & Brad R. Humphreys, 2002. "The Economic Impact of Postseason Play in Professional Sports," Journal of Sports Economics, , vol. 3(3), pages 291-299, August.
    19. Editorial Article, 0. "Contents," Economics of Contemporary Russia, Regional Public Organization for Assistance to the Development of Institutions of the Department of Economics of the Russian Academy of Sciences, issue 2.
    20. Robert A. Baade & Victor A. Matheson, 2001. "Home Run or Wild Pitch?," Journal of Sports Economics, , vol. 2(4), pages 307-327, November.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    sports; subsidies; stadiums; arenas;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H4 - Public Economics - - Publicly Provided Goods

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