If You Build It, They Still Won’t Come

A report commissioned by the Maryland Stadium Authority and the Montgomery County Department of Economic Development tells the planners what they want to hear: that a new sports and entertainment arena in Montgomery County, Maryland, could generate revenue for the county and would give residents a place to hold events without having to leave the county. Based on the Washington Post story, it’s not clear just how strong the report’s argument is: by definition, building a new arena would provide a venue for events, so that’s not much of a claim; and the news story does not tell us if the revenue generated would make it economically viable.

But maybe the report did claim economic viability. Most studies commissioned by planners do. But independent studies never do. This short review of the academic literature finds that “not only are there theoretical reasons to believe that economic impact studies of large sporting events may overstate the true impact of the event, but in practice the ex ante estimates of economic benefits far exceed the ex post observed economic development of host communities following mega-events or stadium construction.”

Last year the Wall Street Journal reported

But while arenas with big-time tenants may bolster a city’s self-image and quality of life, evidence shows they have a minimal economic upside. Most operate at a loss.

In “The Economics of Sports Facilities and Their Communities,” published in 2000 in the Journal of Economic Perspectives, authors Andrew Zimbalist of Smith College and John Siegfried of Vanderbilt University argue that “independent work on the economic impact of stadiums and arenas has uniformly found that there is no statistically significant positive correlation between sports facility construction and economic development.”

The authors cite several studies, including one by sports economist Robert Baade that found “no significant difference in personal income growth from 1958 to 1987 between 36 metropolitan areas that hosted a team in one of the four premier professional sports leagues and 12 otherwise comparable areas that did not.” The authors’ conclusion: Arenas put a drag on the local economy by hurting spending on other activities in the city and boosting municipal costs such as security.

“It doesn’t make sense to build an arena for economic reasons, even if you have a team,” Mr. Zimbalist says.

Several Cato studies have reviewed the literature on stadiums and arenas, as noted here.

Posted on July 2, 2007  Posted to Cato@Liberty

Don’t Mess with Texas . . . Pitchers

Southern-born pitchers are more likely than other pitchers to hit batters in situations where they’ve just given up a home run or a teammate has been hit by the opposing pitcher, an academic study says. According to the Washington Post, business professor Thomas Timmerman was studying the impact of race on pitcher-hitter matchups.

Although he found no link between race and the number of times batters were hit by pitches, he did find an interesting geographical link.

“I found that pitchers from the South are not more likely in general to hit batters,” Timmerman said in a telephone interview, “but they are much more likely to hit batters after giving up a home run, or after a teammate has gotten hit the previous half-inning.”

Timmerman theorizes that this results from the South’s “culture of honor.” Born Fighting, Sen. Jim Webb called it in his book about the Scotch-Irish in America. He wrote about the “rednecks” and their “unique and unforgiving code of personal honor.” Webb wouldn’t be surprised at Timmerman’s findings.

Timmerman used a strictly geographic analysis: he classified pitchers by their state of birth. And he found that half of the active U.S.-born control pitchers who have hit the most batters are from 16 Southern states.

It’s just possible that an ethnic analysis would have strengthened his case. Two of the top non-Southerners on the list, Jeff Weaver and David Wells, were born in southern California. Could they be descended from Okies and Arkies or other Scotch-Irish families who kept heading west and carried the “culture of honor” with them?

Posted on July 2, 2007  Posted to Cato@Liberty

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