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.
2 comments:
I think that I would probably have to agree more with the first mentioned estimates that a city could have a $400 million bost to theor economy from hosting the auperbowl. There will be people spending a lot to travel to and stay in Miami for the superbowl. Airlines, hotels, restaurants, and various stores could all gain profits from these sports fans that they wouldn't be earning otherwise.
I find these studies quite interesting. How do these guys explain why NFL cities fight over the right to host the Super Bowl? Most of the time the Super Bowl site is picked several years in advance. Let's say these guys are correct, and that instead of making $400 million they make $200 million. That is still a great deal of money! Not only does your city get the money from the people in town around the Super Bowl, it also allows for a full month of free advertising about your city. I don't know, maybe these guys are right. But I find it hard to believe these two men were able to able to outsmart 32 NFL organizations and cities.
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