Hotel Tax Collections and a Local Mega-Event

Cities compete for the opportunity to host events that draw large crowds of visitors. The argument is that these visitors bring with them lots of spending in hotels and restaurants, providing jobs for workers in the service industry, and generating sales tax revenues for the city. In many places, there is also a separate tax on hotel and motel accommodations. Indeed, taxes on accommodations are one example of jurisdictions exporting their tax burdens, as people who pay the accommodations taxes are visitors. This paper looks for the beneficial impact of a megaevent by focusing on the accommodations tax collections in and around the jurisdiction that hosts the event.sports, South Carolina, NASCAR, college football, tourism

Caught Stealing: Debunking the Economic Case for D.C. Baseball

District of Columbia mayor Anthony Williams has convinced Major League Baseball to move the Montreal Expos to D.C. in exchange for the city's building a new ballpark. Williams has claimed that the new stadium will create thousands of jobs and spur economic development in a depressed area of the city. Williams also claims that this can be accomplished without tax dollars from D.C. residents. Yet the proposed plan to pay for the stadium relies on some kind of tax increase that will likely be felt by D.C. residents. Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city's economy. The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over the entire metropolitan area. A baseball team in D.C. might produce intangible benefits. Rooting for the team might provide satisfaction to many local baseball fans. That is hardly a reason for the city government to subsidize the team. D.C. policymakers should not be mesmerized by faulty impact studies that claim that a baseball team and a new stadium can be an engine of economic growth

Mega-Events and Housing Costs: Raising the Rent while Raising the Roof?

This paper examines the relationship between hosting mega-events such as the Super Bowl, Olympics, and World Cup and rental housing prices in host cities. If mega-events are amenities for local residents, then rental housing prices can serve as a proxy for estimating residents’ willingness to pay for these amenities. An analysis of rental prices in a panel of American cities from 1993-2005 fails to find a consistent impact of mega-events on rental prices. When controls are placed on the regression models to account for nationwide annual fluctuations in rental prices, mega-events generally exhibit little impact on rental prices in cities as a whole and are as likely to reduce rental prices as increase them. Somewhat stronger evidence exists, however, that mega-events affect rental prices outside of the center city in a fundamentally different manner than in the city core.sports, stadiums, franchises, impact analysis, mega-event, housing

Baseball Strikes and the Demand for Attendance

Professional baseball has experienced numerous work-stoppages over the last 30 years, including three which resulted in the cancellation of games. Existing estimates of the demand for attendance at Major League Baseball games has found that only those events which caused the loss of games influenced attendance. This paper revisits the issue of whether strikes affect attendance and finds that even those lockouts and strikes that do not cause games to be canceled are associated with significantly lower attendance. Moreover, despite dramatic differences in the severity of the three strikes that canceled games, one cannot reject the hypothesis that the effects are the same. Finally, the evidence here suggests that attendance is adversely affected by events leading up to negotiation of a new Basic Agreement between the players and the owners.sports attendance, strikes

Voting on Stadium and Arena Subsidies

We analyze voting on subsidies for professional sports facilities in Harris County (Houston), Texas and Brown County (Green Bay), Wisconsin to learn more about voter preferences for these subsidies. The results differ somewhat between the two jurisdictions, as do the nature of the supports being proposed and the communities. One consistent result is that voting precincts that have a relatively high degree of poverty tend to oppose subsidies for professional sports. Another consistent result is that voters in close proximity to existing facilities are more likely to favor subsidies than are voters living farther from the facilities. In Harris County, the results consistently indicate that those over 65 years of age, whites, and those with Bachelors degrees statistically significantly oppose subsidies while those with higher incomes and blacks favor the subsidies. Different values of consumption benefits, stemming from differences in preferences, may explain these voting patterns.Local Economic Development, Professional Sports, Referendums

NASCAR as a Public Good

Abstract This paper looks for evidence that either a NASCAR track or NASCAR-sanctioned event influences the monthly rents on residential units. Data cover individual housing units in more than 140 SMSAs over the period spanning from 1993 until 2005. During this period, several new tracks opened, while some other tracks closed, and numerous races changed venues. These changes enable us to identify the capitalization of costs and benefits to a community from the presence of NASCAR tracks and events into rental values. The evidence is mixed, varying with the treatment of housing units located in or out of central cities of SMSAs, as well as the manner in which missing housing and community characteristics are treated in the analysis. The results are reasonably clear that presence of a track by itself has little effect, especially on housing units outside the central city of an SMSA. Specific types of races largely appear to have no impact, though in some specifications, the central city and non-central city impacts are about equal but have opposite signs. In these cases, the indication is that the NASCAR events affect non-central city rents, but not those in the central city. Overall, we must conclude that our results reject NASCAR as a source of either large benefits or costs to residents of the host community.tourism, economic impact, special events, NASCAR, auto racing

The Length and Success of NBA Careers: Does College Production Predict Professional Outcomes?

This paper uses data on players drafted in 1987 through 1989 covering both their collegiate and their professional careers. This time period is chosen because we wanted recent players whose playing days have ended. Our analysis evaluates the role of college productivity on draft position and the relationship between college career productivity, measured in three different ways, with professional career productivity measured similarly and with the length of the career. At issue is the effectiveness of NBA executives in identifying college players who will be successful in the pros. Our results suggest an interesting puzzle regarding scoring. The NBA literature suggests scoring is paramount for evaluating professional players, while our results suggest college scoring has little to do with draft position and is relatively weakly associated with professional scoring.NBA, sports, basketball

Do Economists Reach a Conclusion on Subsidies for Sports Franchises, Stadiums, and Mega-Events?

This paper reviews the empirical literature assessing the effects of subsidies for professional sports franchises and facilities. The evidence reveals a great deal of consistency among economists doing research in this area. That evidence is that sports subsidies cannot be justified on the grounds of local economic development, income growth or job creation, those arguments most frequently used by subsidy advocates. The paper also relates survey evidence showing that economists in general oppose sports subsidies. In addition to reviewing the empirical literature, we describe the economic intuition that probably underlies the strong consensus among economists against sports subsidies.sports, subsidies, stadiums, arenas

Are Hispanic Immigrant Families Reviving the Economies of America's Small Towns?

In the 1990s, rural areas and small towns in the United States, which had been losing population, became the destinations for an increasing number of Hispanic immigrants and their families, slowing and in some cases reversing population declines. In this paper, we examine whether faster growth in the Hispanic population is linked to faster growth in income per capita in rural areas and small towns. Our results indicate strong support for the hypothesis that Hispanic population growth has fueled increased economic growth in those small, rural communities whose populations had been in decline during the 1970s and 1980s.regional economic growth, Hispanics, migration

Novelty Effects of New Facilities on Attendance at Professional Sporting Events

We investigate the possibility that new facilities affect attendance - the "novelty effect" - in professional baseball, basketball, and football from 1969-2001 by estimating the parameters of a reduced form attendance model. Our results indicate a strong, persistent novelty effect in baseball and basketball and little or no novelty effect in football. Our estimates of size and duration of the novelty effect imply that, in a new facility, at a minimum, a baseball team would sell an additional 2,561,702 tickets over the first eight seasons, a basketball team 446,936 over the first nine seasons, and a football team 163,436 over the first five seasons. This increase in attendance also suggests a corresponding increase in revenues that could be tapped to help defray the large public subsidies that state and local governments frequently provide to new stadium and arena construction projects.Professional Sports, Attendance, Novelty Effect