The Impact of Sports Teams on the Urban Economy: Evidence from the St. Louis Rams’ Departure

Brad Humphreys

A chapter in The Economic Impact of Sports Facilities, Franchises, and Events, 2023, pp 171-181 from Springer

Abstract: Abstract A large body of evidence finds no tangible new economic impact of professional sports on the economy in host cities. Displacement spending, the idea that spending in and around sports facilities on game day would have been spent somewhere else in the city, represents one explanation for this lack of economic impact. I empirically analyze the departure of an NFL team from a large US city in 2015 using a difference-in-differences approach to develop evidence that displacement spending occurred after the team departure using data on establishments in the hospitality industry from County Business Patterns. Results show increases in the number of establishments, employment, and payroll in restaurants throughout the metropolitan area following the departure, supporting the presence of displacement spending in this setting. Little impact occurred in the sector containing bars. Evidence supporting the presence of displacement spending strengthens the existing evidence finding no economic impact of professional sports by providing a plausible mechanism explaining this lack of impact.

Keywords: Displacement spending; Professional sports; Economic impact (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:semchp:978-3-031-39248-1_12

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DOI: 10.1007/978-3-031-39248-1_12

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