Baseball Musings
Baseball Musings
February 17, 2009
Don't Subsidize Stadiums!

Cafe Hayek offers a link to a study about economists opinions on subsidizing sports venues. The conclusion of the survey:

We have seen that economists in general, as represented by Whaples's survey (2006), oppose sports subsidies. Economists reach the nearly unanimous conclusion that "tangible" economic benefits generated by professional sports facilities and franchises are very small; clearly far smaller than stadium advocates suggest and smaller than the size of the subsidies. The fact that sports subsidies continue to be granted, despite the overwhelming preponderance of evidence that no tangible economic benefits are generated by these heavily subsidized professional sports facilities, remains a puzzle.

Rent-seeking generates powerful incentives for people like professional
sports team owners and professional athletes to divert public money into their
pockets. Elected officials are especially susceptible to flattery from professional
athletes, and these officials are also keenly aware of the political value of keeping
the local team in town regardless of the underlying cost-benefit calculus. These
explanations, along with simple collective foolishness when it comes to matters of
the heart like sports, have considerable explanatory power. Moreover, the implicit
and explicit anti-trust protection extended to North American professional sports
leagues probably contributes to the ability of team owners to extract subsidies
from local governments. At any rate, we seem to have reached the classic paradox
in which economists reach a conclusion but are unable to make economic wisdom
decisive in public policy decisions.

You may want to download the PDF and email it to a politician in your area who is trying to put your tax money to work building a venue.


Posted by David Pinto at 07:49 PM | Stadiums | TrackBack (0)
Comments

One of the reasons that people aren't informed of this is because the media don't do their job.

The Washington Post was all for the the new Nationals' stadium. The Baltimore Sun was all for the public funding of Camden Yards and (what is now) M & T Bank Stadium.

There's a reason the papers push for these public expenses: their own sports sections. If a paper wants a major league sports section, it needs a major league team to report on.

In this way the interests of the owners and the papers coincide at the expense of the public.

When Ellen Sauerbrey ran (unsuccessfully) for governor of Maryland in 1994, she cited the studies at the time against the public funding of a new football stadium. If she had won, Baltimore probably would not have gotten the Ravens. She was right, but she wasn't governor.

Posted by: soccer dad at February 18, 2009 09:25 AM
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