The Effect of Professional Sports on the Earnings of Individuals: Evidence from Microeconomic Data

Abstract

This paper explores the impact of professional sports teams and stadiums on the wages of individuals employed in several narrowly defined occupational groups in cities in the United States. The occupational groups examined are among those that proponents of public funding of professional sports claim will benefit economically from these stadiums. Our analysis uses data from the March Supplement to the Current Population Survey (CPS) for the period 1977 to 1998 as well as sports variables previously utilized by Coates and Humphreys (1999), (2001). Previous research focused on aggregate measures of income whereas here the focus is on the wages of individual workers. The results of the study confirm conclusions of earlier research that the overall sports environment is frequently statistically significant as a determinant of earnings and that the predicted mean impact of sports on wages in a sample of individuals employed in occupations closely related to professional sports is an annual average decrease in real earnings of $47.95. The results also show that the effects of the sports environment on wages differ across job-types. Workers in retail occupations earn more on average each year due to the presence of professional sports while workers in other peripherally related occupations like food services and hotels earn less.Local Economic Development, Professional Sports, Current Population Survey