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Public Financing of Professional Sports Facilities and Drug Asset Forfeiture

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  • Benjamin Blemings
  • Brad Humphreys

Abstract

Local governments provide many crucial services from limited budgets, yet often subsidize the profitable, private businesses in professional sports leagues in the United States. Policing represents one important public service. Policing typically constitutes large portions of government budgets and also generates revenue through fines and forfeitures. Existing evidence suggests that large municipal expenditures in other areas can have an ambiguous effect on policing outcomes. This paper addresses the question of whether large public expenditures on sports facilities affect drug asset forfeiture using two-way fixed effects (TWFE) and generalized dynamic model specifications (GDMS). The results are similar across estimation methods, with static TWFE results suggesting a treatment effect of $1,274–5,589 in additional forfeiture per million in subsidies and results from the newer GDMS estimators suggesting $7,703 per million in subsidies. The results imply that, beyond generating no tangible local economic benefits, public subsidization of sports facilities also leads police to make up budget shortfalls by more aggressive policing, which has important implications for racial equity.

Suggested Citation

  • Benjamin Blemings & Brad Humphreys, 2024. "Public Financing of Professional Sports Facilities and Drug Asset Forfeiture," Public Finance Review, , vol. 52(4), pages 439-465, July.
    • Handle: RePEc:sae:pubfin:v:52:y:2024:i:4:p:439-465
    DOI: 10.1177/10911421241232444
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    References listed on IDEAS

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    1. Michael D. Makowsky & Thomas Stratmann & Alex Tabarrok, 2019. "To Serve and Collect: The Fiscal and Racial Determinants of Law Enforcement," The Journal of Legal Studies, University of Chicago Press, vol. 48(1), pages 189-216.
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    3. 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.
    4. Goldman, Matt & Kaplan, David M., 2018. "Comparing distributions by multiple testing across quantiles or CDF values," Journal of Econometrics, Elsevier, vol. 206(1), pages 143-166.
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