Will the Super Bowl Be a Winner for Miami?

Super Bowl XLI will be hosted by Miami this Sunday and NFL and city officials are touting the economic benefits that the Big Game will generate for the local community. By some estimates, the city of Miami can expect a $400 million boost to the local economy due to increased spending by fans.

Such estimates, however, are usually inflated and result from the interplay of civic hype and NFL opportunism. Studies by Baade and Matheson (2000) and Coates and Humphrey (2002) argue that postseason play is not associated with any significant impact on real per capita income in host cities.

The major reason for a lack of net benefits from the likes of the Super Bowl is due to a crowding out effect--consumers merely shift their spending from one form of entertainment to another. In addition, not all of the spending stays in the local community as some of it "leaks" out to the homes of the suppliers of the various goods and services that are purchased.

It kind of makes you wonder why cities want to raise the taxes of its citizens to pay for the building of new stadiums to support the wealthy owners of the local pro sports teams.

Buying Local Makes Sense and Dollars

It seems as though it may be more beneficial in the long run to make purchases from the local businesses rather than large corporations such as Walmart, Home Depot, etc. CEOs of large companies have become increasingly interested in making the company larger rather than focusing on increasing quality of products and satisfying the customer. Thus, small businesses have learned that to compete with large companies, they must offer competitive prices and quality service. In fact, deciding to buy from a local store can actually help improve the economy of the community. When you buy from local businesses, the money has the opportunity to circulate throughout the town, meaning the money could go toward school improvement, community improvement, etc.

Coming from a small town, this article seems to make a good point. The local businesses definitely suffered when Wal-Mart came in. Thus, there needs to be support for small businesses. Someday we could be small business owners trying to compete against huge corporations offering cheaper prices on goods. Though it may be cheaper to buy from places like Home Depot, etc., you have to figure in the amount of money spent on traveling further, the time involved that could be used for something else, and the quality passed up by buying from a cheaper store. Does buying cheaper products outweigh the opportunity cost?