The Impact of Stadium and Professional Sports on Metropolitan Area Development

Abstract

ABSTRACT More and more cities are being encouraged to subsidize sports stadiums as an economic development tool. In this paper regression analysis using census data on nine different metropolitan areas is employed to evaluate the impact of stadiums and professional sports teams on area development. Previous attempts to estimate the effectiveness of sports‐based development have used assumption‐driven trade multiplier models. The evidence presented here is that the presence of a new or renovated stadium has an uncertain impact on the levels of personal income and possibly a negative impact on local development relative to the region. These results should serve as a caution to those who assume or assert a large positive stadium impact.