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Estimating Local Welfare Generated by an NFL Team under Credible Threat of Relocation

Author

Listed:
  • Aju J. Fenn

    () (Department of Economics & Business, 14 E. Cache La Poudre St., Colorado College, Colorado Springs, CO 80903, USA)

  • John R. Crooker

    () (Department of Economics & Finance, Dockery 300-G, University of Central Missouri, Warrensburg, MO 64093, USA)

Abstract

This study offers the opportunity to examine the welfare contribution of the Minnesota Vikings to Minnesota households in the context of a credible threat of team relocation. We find the credibility of the threat of relocation is essential to providing unbiased estimates of welfare. This study utilizes contingent valuation methodology (CVM) and a random utility model (RUM) to analyze Minnesotans’ decision-making mechanisms for supporting a new stadium initiative. While previous studies have attempted to measure the welfare associated with a sports franchise, we develop and discuss bias that may be imparted to estimates when the researcher fails to calculate a ‘‘choke price.’’ Further, we develop an unbiased approach to identify welfare when respondents perceive a risk of losing the franchise. The range of welfare contribution by the Vikings to households in Minnesota is $445.3 million to $1,571.3 million according to a 95% confidence interval based on our study.

Suggested Citation

  • Aju J. Fenn & John R. Crooker, 2009. "Estimating Local Welfare Generated by an NFL Team under Credible Threat of Relocation," Southern Economic Journal, Southern Economic Association, vol. 76(1), pages 198-223, July.
  • Handle: RePEc:sej:ancoec:v:76:1:y:2009:p:198-223
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    File URL: http://dx.doi.org/10.4284/sej.2009.76.1.198
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The Intangible Benefits of the Vikings and the Relocation Threat Credibility
      by Phil Miller in Market Power on 2010-01-19 23:55:03

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:

    1. Brad R. Humphreys & Adam Nowak, 2015. "Professional Sports Facilities, Teams and Property Values: Evidence from Seattle's Key Arena," Working Papers 15-06, Department of Economics, West Virginia University.
    2. repec:spr:schmbr:v:70:y:2018:i:1:d:10.1007_s41464-017-0044-9 is not listed on IDEAS
    3. Humphreys, Brad & Johnson, Bruce & Mason, Daniel & Whitehead, John, 2011. "Estimating the Value of Medal Success at the 2010 Winter Olympic Games," Working Papers 2011-20, University of Alberta, Department of Economics.
    4. 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.
    5. 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.
    6. Humphreys, Brad R. & Zhou, Li, 2015. "Reference-dependent preferences, team relocations, and major league expansion," Journal of Economic Behavior & Organization, Elsevier, vol. 109(C), pages 10-25.
    7. Anping Chen & Marlon Boarnet & Mark Partridge & Haifang Huang & Brad R. Humphreys, 2014. "New Sports Facilities And Residential Housing Markets," Journal of Regional Science, Wiley Blackwell, vol. 54(4), pages 629-663, September.
    8. Huang, Haifang & Humphreys, Brad, 2012. "Do New Sports Facilities Revitalize Urban Neighborhoods? Evidence from Residential Mortgage Applications," Working Papers 2012-5, University of Alberta, Department of Economics.
    9. repec:sae:jospec:v:19:y:2018:i:2:p:279-296 is not listed on IDEAS
    10. Humphreys, Brad & Zhou, Li, 2014. "Loss Aversion, Team Relocations, and Major League Expansion," Working Papers 2014-3, University of Alberta, Department of Economics.
    11. repec:eee:regeco:v:66:y:2017:i:c:p:39-51 is not listed on IDEAS
    12. Michael C. Davis & Christian M. End, 2011. "Team Success, Productivity and Economic Impact," Chapters,in: The Economics of Sport, Health and Happiness, chapter 7 Edward Elgar Publishing.
    13. O. Ashton Morgan & John C. Whitehead, 2018. "Willingness to Pay for Soccer Player Development in the United States," Journal of Sports Economics, , vol. 19(2), pages 279-296, February.

    More about this item

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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