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

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  • Aju J. Fenn
  • John R. Crooker

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, John Wiley & Sons, vol. 76(1), pages 198-223, July.
    • Handle: RePEc:wly:soecon:v:76:y:2009:i:1:p:198-223
    DOI: 10.4284/sej.2009.76.1.198
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    Cited by:

    1. Cristian F. Sepulveda, 2022. "Cost-benefit Analysis of an 'Average' Professional Sports Team or Stadium in the United States," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper2210, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    2. 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.
    3. Brad R. Humphreys & Bruce K. Johnson & Daniel S. Mason & John C. Whitehead, 2018. "Estimating the Value of Medal Success in the Olympic Games," Journal of Sports Economics, , vol. 19(3), pages 398-416, April.
    4. Luke Petach & Dustin Rumbaugh, 2021. "Are You Ready for Some Football? Estimating the Effect of American Football Season on Labor Supply in the United States," Journal of Sports Economics, , vol. 22(8), pages 893-920, December.
    5. John Charles Bradbury, 2022. "Does hosting a professional sports team benefit the local community? Evidence from property assessments," Economics of Governance, Springer, vol. 23(3), pages 219-252, December.
    6. Michael C. Davis & Christian M. End, 2011. "Team Success, Productivity and Economic Impact," Chapters, in: Plácido Rodríguez & Stefan Késenne & Brad R. Humphreys (ed.), The Economics of Sport, Health and Happiness, chapter 7, Edward Elgar Publishing.

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