Saturday, August 9, 2014

The economic impact of sports teams

This is a nice Q&A that discusses some of the nuances one faces when determining the economic impact of a sports team or stadium.

Baade: The substitution effect is most visible when a new sports venue is built. If the fan base is primarily comprised of local residents, is the time and money that they would ordinarily spend at the mall, movie theater, bar, etc. now going to be spent at the new stadium? In these cases, incoming revenues to the city will simply shift from one source to another. But rarely does it result in new or additional revenue, hence the term “substitution.”

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