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Growth Effects of Sports Franchises, Stadiums, and Arenas: 15 Years Later

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The Economic Impact of Sports Facilities, Franchises, and Events

Part of the book series: Sports Economics, Management and Policy ((SEMP,volume 23))

Abstract

A 1999 study by Dennis Coates and Brad R. Humphreys found the presence of major sports franchises to have no significant impact on the growth rate of per capita personal income and to be negatively correlated with the level of per capita personal income for a sample of all cities that had been home to at least one franchise in any of three professional sports—baseball, basketball, and football—at some time between 1969 and 1994. This paper returns to the questions Coates and Humphreys asked using an additional 17 years of data and a number of new stadiums, arenas, and franchises. The data cover 1969–2011 and add hockey and soccer franchises to the mix while also including all standard metropolitan statistical areas rather than just those that housed franchises in the major professional leagues. The analysis also adds two new dependent variables: wage and salary disbursements and wages per job. The results here are generally similar to those of Coates and Humphreys; the array of sports variables, including the presence of franchises, arrival and departure of clubs in a metropolitan area, and stadium and arena construction, is statistically significant. However, individual coefficients frequently indicate harmful effects of sports on per capita income, wage and salary disbursements, and wages per job.

This paper was supported by research assistance from the Mercatus Center at George Mason University. I thank Brian M. Deignan for his efforts putting together the data for the project.

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Notes

  1. 1.

    In practice, this variable always took value of one for several quarters before as well as during and after the event.

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Author information

Authors and Affiliations

  1. Department of Economics, University of Maryland, Baltimore County, Baltimore, MD, USA

    Dennis Coates

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  1. Dennis Coates
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Correspondence to Dennis Coates .

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Editors and Affiliations

  1. Department of Economics and Accounting, College of Holy Cross, Worcester, MA, USA

    Victor A. Matheson

  2. Department of Economics and Accounting, College of the Holy Cross, Worcester, MA, USA

    Robert Baumann

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Coates, D. (2023). Growth Effects of Sports Franchises, Stadiums, and Arenas: 15 Years Later. In: Matheson, V.A., Baumann, R. (eds) The Economic Impact of Sports Facilities, Franchises, and Events. Sports Economics, Management and Policy, vol 23. Springer, Cham. https://doi.org/10.1007/978-3-031-39248-1_5

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