Do New Major League Ballparks Pay for Themselves?

Marc Poitras
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Marc Poitras: University of Dayton

Journal of Business, 2006, vol. 79, issue 5, pages 2275-2300

Abstract: In recent decades local governments have allocated billions of dollars to subsidizing construction of facilities for major league baseball. We use panel data that cover all major league baseball teams from 1989–2001 to estimate the impact of ballpark construction on team revenue. Our estimates imply that a typical new ballpark generates additional revenue sufficient to cover most or all of its capital cost. It follows that any external benefits of ballpark construction are likely to be inframarginal and that continuance of large public subsidies cannot be justified on economic grounds.

Date: 2006
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