Sunday, 6 March 2011

The economics of the sports stadium again

With AMI stadium here in Christchurch now in need of a large amount of repair work it is a good time to think about the economics of such a stadium. It looks like the ratepayer/taxpayer will be on the hook for very large bill so lets ask, Is the stadium worth it?

Sports economist Phil Miller at the Market Power blog helps with the answer:
Fortunately, the Atlanta Journal Constitution presents an article in which sports economists discuss some hard data.
A new open-air stadium downtown for the Atlanta Falcons would be of enormous benefit — to the Atlanta Falcons. Neither local taxpayers nor the region’s economy is likely to accrue much advantage from a new arena built on public land, in part with public money, experts told The Atlanta Journal-Constitution last week.

Economists have studied the economic impact of stadiums to death, and the clear consensus is that there is no positive impact,” said author and sports economist J.C. Bradbury of Kennesaw State University. “Economists don’t agree on a lot, but right wing, left wing, they all agree on that.” (Emphasis added)
So is the stadium worth it? No.


Seamus Hogan said...


The economist consensus does not show that stadia are not worth spending public money on; it just shows that if they are worth spending public money on, it is purely because of the utility that local non-ticket-buyers get from having the stadium there, not from some "economic impact" nonsense.

Paul Walker said...

But if local non-ticket-buyers get so much utility from having the stadium there, then they can pay for it and thus no public money needed. Its a case of put your money where your utility is.