The Growth Effects of Sport Franchises, Stadia and Arenas
UMBC Dept. of Economics Working Paper #97-02
23 Pages Posted: 29 Sep 1997
Date Written: September 16, 1997
This paper investigates the relationship between professional sports franchises and venues and real per capita personal income in 37 Standard Metropolitan Statistical Areas in the United States over the period 1969-1994. Our empirical framework accounts for the entry and departure of professional football, basketball and baseball franchises; the construction of arenas and stadia; and other sports-related factors over this time period. In contrast to other existing studies, we find evidence that some professional sports franchises reduce the level of per capita personal income in metropolitan areas and have no effect on the growth in per capita income, casting doubt on the ability of a new sports franchise or facility to spur economic growth. We also find evidence that results obtained from estimating reduced form relationships, a common practice in the literature, are not robust to alternative statistical model specifications.
JEL Classification: R58, O18, H70
Suggested Citation: Suggested Citation