Through the Broken Window: The Business of Sports

Friday, August 11, 2006

The Business of Sports

I know that subsidizing sports in the last few decades has become an extremely popular economic development approach. Although there is some debate as to how valuable an asset a sports complex is to a local economy, it does seem difficult to legitimize the expenditures of tax-payer dollars to support athletes and the wealthy team owners. Given that all of these complexes are located in areas of significant poor and poverty levels, it is questionable as to their distributional effect.

Are they neglecting the poor in favor of the Sport?

# posted by Chris @ 8:09 AM

Comments:

Or maybe they are helping the poor by bringing them jobs through the stadium!! Or so goes the argument.

This is one place where I would agree with you and Travis regarding the mis-use of in-put output analysis.

I was doing some background research for a similar project at work and I came across a paper that kinda lays out the common mistakes made by economic impact analysis(EIA) for sports venues.

One common mistake is one you and I were talking about Chris. Many of them assume that basically ALL visitors to the venue will be from outside the economic "region" (ussually defined as the state). A much more accurate estimate would be close to 30%.

So it's no wonder most EIAs for sport venues over estimate the impacts so much. They make some very unreal assumptions about regional "exports".

# posted by