The growth effects of sport franchises, stadia, and arenas

This paper investigates the relationship between professional sports franch ises and venues and real per capita personal income in 37 standard metropol itan statistical areas in the United States over the period 1969 to 1994. O ur empirical framework accounts for the entry and departure of professional football, basketball, and baseball franchises, the construction of arenas and stadia; and other sports related factors over this time period. In cont rast to other existing studies, we find evidence that some professional spo rts franchises reduce the level of per capita personal income in metropolit an areas and have no effect on the growth in per capita income, casting dou bt on the ability of a new sports franchise or facility to spur economic gr owth. We also find evidence that results obtained from estimating reduced-f orm relationships, a common practice in the literature, ave not robust to a lternative reduced-form specifications. (C) 1999 by the Association for Pub lic Policy Analysis and Management.