Public Subsidies to Stadiums: Do the Costs Outweigh the Benefits?

Daraius Irani
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Daraius Irani: University of California, Santa Barbara Economic Forecast Project

Public Finance Review, 1997, vol. 25, issue 2, 238-253

Abstract: This article reexamines the costs and benefits to cities of publicly subsidized stadiums by measuring the welfare gain of a stadium. Previous research has shown that the economic impact of a stadium on a local economy is insignificant compared to the costs of the stadium. However, the literature has ignored the welfare gain generated by a stadium. The annual consumer surplus generated by a stadium is calculated from a simple demand curve for baseball games using 1972 to 1991 data on ticket prices and attendance. Estimates of the consumer surplus are in the range of $2.2 million to $54.1 million per season. Further, the annual net benefit of a stadium exclusive of any induced economic activity ranges from minus $19.1 million to $32.8 million.

Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:25:y:1997:i:2:p:238-253

DOI: 10.1177/109114219702500205

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