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A Note on the Local Economic Impact of Sports Expenditures

Author

Listed:
  • 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%.

Suggested Citation

  • John Siegfried & Andrew Zimbalist, 2002. "A Note on the Local Economic Impact of Sports Expenditures," Journal of Sports Economics, , vol. 3(4), pages 361-366, November.
  • Handle: RePEc:sae:jospec:v:3:y:2002:i:4:p:361-366
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    Citations

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    Cited by:

    1. Robert Baumann & Bryan Engelhardt & Victor A. Matheson, 2012. "Labor Market Effects of the World Cup: A Sectoral Analysis," Chapters,in: International Handbook on the Economics of Mega Sporting Events, chapter 22 Edward Elgar Publishing.
    2. Gabe, Todd & Lisac, Nicholas, 2013. "Local Economic Impacts of Popular Music Concerts," MPRA Paper 65911, University Library of Munich, Germany.
    3. Philip K. Porter & Daniel M. Chin, 2012. "Economic Impact of Sports Events," Chapters,in: International Handbook on the Economics of Mega Sporting Events, chapter 15 Edward Elgar Publishing.
    4. Lasse Steiner & Bruno Frey & Simone Hotz, 2015. "European Capitals of Culture and life satisfaction," Urban Studies, Urban Studies Journal Limited, vol. 52(2), pages 374-394, February.
    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. repec:eee:touman:v:34:y:2013:i:c:p:238-246 is not listed on IDEAS
    7. Nagy-Becsky, Patricia & Dekan, Tamas & Szoke, Reka & Bacs, Zoltan, 2015. "The relevance of sports financing," APSTRACT: Applied Studies in Agribusiness and Commerce, AGRIMBA, vol. 9(1-2).
    8. Rhodes, M. Taylor, 2013. "Pigskin, Tailgating and Pollution: Estimating the Environmental Impacts of Sporting Events," UNCG Economics Working Papers 13-19, University of North Carolina at Greensboro, Department of Economics.
    9. Robert Baumann & Victor A. Matheson, 2013. "Estimating economic impact using ex post econometric analysis: cautionary tales," Chapters,in: The Econometrics of Sport, chapter 10, pages 169-188 Edward Elgar Publishing.
    10. repec:kap:iaecre:v:21:y:2015:i:2:p:213-225 is not listed on IDEAS
    11. 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.
    12. Todd M. Gabe & Nicholas A. Lisac, 2014. "A Note on the Effects of Popular Music Concerts on Hospitality Sales: The Case of Waterfront Concerts in Bangor, Maine," The Review of Regional Studies, Southern Regional Science Association, vol. 44(1), pages 61-74, Spring.
    13. 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.
    14. Karima Kourtit & Peter Nijkamp & Roger R. Stough (ed.), 2015. "The Rise of the City," Books, Edward Elgar Publishing, number 15798.
    15. Deepak Premkumar & Austin Quackenbush & Georgeanne Artz & Peter Orazem, 2013. "If You Build it, Will They Come?: Fiscal Federalism, Local Provision of Public Tourist Amenities, and the Vision Iowa Fund," The Review of Regional Studies, Southern Regional Science Association, vol. 43(2,3), pages 155-173, Winter.
    16. Matthew Rousu & Dave Ramsaran & Dylan Furlano, 2015. "Guidelines for Conducting Economic Impact Studies on Fracking," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 21(2), pages 213-225, May.
    17. 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.
    18. 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).
    19. 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.
    20. Kavetsos, Georgios & Szymanski, Stefan, 2010. "National well-being and international sports events," Journal of Economic Psychology, Elsevier, vol. 31(2), pages 158-171, April.
    21. Michael Sam & Jay Scherer, 2006. "The Steering Group as Policy Advice Instrument: A Case of “Consultocracyâ€\x9D in Stadium Subsidy Deliberations," Policy Sciences, Springer;Society of Policy Sciences, vol. 39(2), pages 169-181, June.

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