About the Stadium Impact Project

Project Overview:

Sports stadiums are a common feature of urban centers. Frequently, they are seen as drivers of business, tourism, and revenue. [3] The goal of stadium analysis is to determine what economic effects, if any, sports stadiums have on their communities.

Stadiums are often publicly funded. [2] A well-cited introduction to the topic can be found at the wikipedia page for stadium subsidies. Funding can come via subsidies for construction, tax exemptions for sports organizations, or both. Either way, taxpayers shoulder a substantial portion of the cost. Governments frequently make the argument that sports stadiums provide economic benefits that offset their public cost. Economic arguments used to support the public funding of stadiums include:

  • Increased tourism (which typically buoys service industries like hotels and restaurants)
  • Job creation. Pro-tourism groups estimate that tourism is responsible for 1 in 10 jobs worldwide. Additionally, the construction and operation of a sports stadium creates jobs. [3]
  • Attendees increase local spending and tax revenue. [3]


In addition to economics, supporters of publicly funded stadiums argue that there are social or intangible benefits. [4] These include civic pride, camaraderie among fans, and even a reduction in crime during sporting events. [5] Baltimore Ravens Quarterback Ray Lewis once said, “Do this research if we don't have a season -- watch how much evil, which we call crime, watch how much crime picks up, if you take away our game.”

However, the actual impacts of sports stadiums are difficult to quantify. Many studies have attempted to measure the purported effects, and results are generally mixed to negative. [2] [3] [4] This project uses readily-available census data to assess whether these benefits materialize for the communities in question.

Limitations:

In addition to a 10 year full count, the US Census does smaller surveys every year, called the American Community Survey (ACS). ACS data is based on samples, rather than full counts. Consequently, there is a margin of error, as the samples are extrapolated to make statements about the general population. In order to mitigate this error, the ACS compiles multiple samples of differing sizes into its estimates.

ACS data is available in 1-year, 3-year, and 5-year estimates. The ACS data used in this project is from 5-year estimates. As compared to the 1-year and 3-year estimates, the 5-year estimates offer the following benefits:

  • Largest sample size
  • Most complete sampling (the 1-year and 3-year estimates only sample from populations meeting a minimum size)
  • Most reliable (lowest margin of error)

Despite the improved accuracy they provide, the 5-year estimates used are less current. [1]

Aside from the limitations inherent to ACS, the data used here is not controlled for external factors. In an attempt to account for this, the target area around a stadium is compared to the wider metro area, as well as the state overall.

Citations:

[1] When to Use 1-year, 3-year, or 5-year Estimates
[2] Subsidizing Billionaires: How Your Money is Being Used to Construct Professional Sports Stadiums
[3] What Are the Benefits of Hosting a Major League Sports Franchise?
[4] The Intangible Benefits of Sports Teams
[5] Can watching pro sports on TV prevent crime?