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Is There A Case For Subsidizing Sports Stadiums?

Author

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  • Victor Matheson
Abstract
In recent decades, governments have committed enormous public resources to subsidize construction of new stadiums, and the dollar value of taxpayer contributions for these subsidies continues to climb. Spending of taxpayer dollars includes both direct subsidies from state and local governments, as well as indirect subsidies from the use of tax-exempt bonds to finance construction. In granting stadium subsidies, governments claim that the stadiums are a public good that attracts tourists and businesses, thereby generating increased spending and job creation�benefits that flow to the community rather than to team owners. But do such benefits exist, and are they large enough to justify the scale of the subsidies? Brad Humphreys, Professor of Economics at West Virginia University, and Victor Matheson, Professor of Economics at the College of the Holy Cross, address the wisdom of public funding of sports stadiums based on the evidence. Brad argues that stadiums should not be subsidized by taxpayers, as the evidence fails to identify any tangible economic benefits generated by stadiums, and a growing body of evidence reveals that stadiums also generate additional local crime, pollution, and congestion. In contrast, Victor argues that while the economic benefits of a new stadium are probably not high enough to justify a taxpayer subsidy of the full construction costs, the benefits may be enough to justify covering some fraction of the costs. Furthermore, governments may use the subsidies to achieve desired development in targeted neighborhoods.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Victor Matheson, 2019. "Is There A Case For Subsidizing Sports Stadiums?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 38(1), pages 271-277, January.
    • Handle: RePEc:wly:jpamgt:v:38:y:2019:i:1:p:271-277
    DOI: 10.1002/pam.22096
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    Citations

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    Cited by:

    1. Brad R. Humphreys, 2023. "Professional Sports Subsidies and Urban Congestion Externalities: Assessing 50 Years of Failed Urban Economic Development Policies," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 49(4), pages 457-474, October.
    2. Zachary T. Keeler & Heather M. Stephens & Brad R. Humphreys, 2021. "The Amenity Value of Sports Facilities: Evidence From the Staples Center in Los Angeles," Journal of Sports Economics, , vol. 22(7), pages 799-822, October.
    3. Stefan Szymanski, 2023. "Anticipating the honeymoon: Event study estimation of new stadium effects in Major League Baseball using the imputation method," Economic Inquiry, Western Economic Association International, vol. 61(4), pages 1077-1102, October.
    4. Propheter, Geoffrey, 2020. "The effect of a new sports facility on property development: Evidence from building permits and a localized synthetic control," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 50(1), December.
    5. John Charles Bradbury, 2022. "Does hosting a professional sports team benefit the local community? Evidence from property assessments," Economics of Governance, Springer, vol. 23(3), pages 219-252, December.
    6. Tsai, I-Chun, 2024. "A wise investment by urban governments: Evidence from intelligent sports facilities," Journal of Asian Economics, Elsevier, vol. 92(C).
    7. Geoffrey Propheter, 2023. "Sports Facilities as a Housing Amenity: Do Prices Follow Facilities?," Journal of Sports Economics, , vol. 24(4), pages 443-474, May.
    8. Geoffrey Propheter, 2021. "Sports facilities and the local property tax base in recovery," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(5), pages 1687-1701, October.
    9. Candon Johnson & Joshua Hall, 2019. "The Public Choice of Public Stadium Financing: Evidence from San Diego Referenda," Economies, MDPI, vol. 7(1), pages 1-9, March.
    10. John Charles Bradbury, 2022. "The impact of sports stadiums on localized commercial activity: Evidence from a Business Improvement District," Journal of Regional Science, Wiley Blackwell, vol. 62(1), pages 194-217, January.

    More about this item

    JEL classification:

    • Z28 - Other Special Topics - - Sports Economics - - - Policy
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

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