Document Type
Article
Publication Date
1-1-2002
Publication Title
Journal of Sports Economics
Abstract
Public subsidies for sports stadiums and arenas are often justified as a means to boost the local economy. The argument relies on historical local economic impact multipliers that misrepresent the effect of consumer expenditures on professional sports. Sports expenditures are subject to extraordinary consumer substitution away from other local expenditures, and they suffer unusually large first round leakages from the local economy because, inter alia, players export their earnings to the locale of their permanent residence. This note illustrates the extent of such leakages using information about the permanent residence of players in the National Basketball Association. While 93% of average employees live in the area where they work, only 29% of NBA players do the same. The illustration shows that a standard local economic impact multiplier exaggerates the stimulative effect of sports expenditures by over 400%.
Volume
3
Issue
4
First Page
361
Last Page
366
DOI
10.1177/152700202237501
ISSN
15270025
Rights
© 2002 Sage Publications
Recommended Citation
Siegfried, John and Zimbalist, Andrew, "A Note on the Local Economic Impact of Sports Expenditures" (2002). Economics: Faculty Publications, Smith College, Northampton, MA.
https://scholarworks.smith.edu/eco_facpubs/50
Comments
Archived as published. Open access paper.