The Econometrics of Sport

The Econometrics of Sport

New Horizons in the Economics of Sport series

Edited by Plácido Rodríguez, Stefan Késenne and Jaume García

The study of sport in the economy presents a rich arena for the application of sharply focused microeconomics, macroeconomics and econometrics to both team and individual outcomes. This unique book offers a survey of recent research that follows the tradition of empirical and theoretical analysis of sport economics and econometrics.

Chapter 10: Estimating economic impact using ex post econometric analysis: cautionary tales

Robert Baumann and Victor A. Matheson

Subjects: economics and finance, econometrics, sports


Since the seminal work of Baade and Dye (1988) over twenty years ago, the analysis of the economic impact of sports teams, stadiums and major athletic events on host economies has elicited significant attention from sports economists. There are two main reasons. First, the topic has considerable public finance implications. Over the past two decades over100 stadium and arena construction projects have taken place at a cost totaling in excess of $30 billion in the US and Canada alone (Baade and Matheson, 2011). Since over half of this cost has been borne by state and local governments, it is reasonable to ask whether taxpayers are getting a good return on their investment. The second reason for the consideration is the clear difference between the ex ante economic benefit estimates provided by economists working in a consulting capacity at the behest of sports organizers and the ex post estimates provided by economists working in a scholarly setting. Ex ante economic impact numbers are typically generated by predicting the number of visitors to an event and the average spending per visitor.

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