Sports Franchises, Events, and City Livability: An Examination of Spectator Sports and Crime Rates

By Baumann, Robert; Ciavarra, Taylor et al. | The Economic and Labour Relations Review : ELRR, June 2012 | Go to article overview

Sports Franchises, Events, and City Livability: An Examination of Spectator Sports and Crime Rates


Baumann, Robert, Ciavarra, Taylor, Englehardt, Bryan, Matheson, Victor A., The Economic and Labour Relations Review : ELRR


Introduction

It is a common refrain among sports boosters, city officials, and professional teams and leagues that sports teams and major athletic events bring significant economic windfalls to host cities. For example, estimates for the annual economic impact of a major league professional sports franchise in the United States often exceed $100 million (Oregon Baseball Campaign 2002) while organisers of sporting events claim impacts ranging from the tens of millions for league all-star games (Selig, Harrington, and Healey 1999) to the hundreds of millions for major championships like the Super Bowl of American football or European soccer's Champions League Final (National Football League 1999) and even into the billions for the largest of the so-called 'mega-events' such as the Olympics or World Cups in sports such as soccer or rugby (Humphreys and Plummer 1995).

Most academic examinations of the direct economic impact of sports teams, stadiums, and events on observable economic variables such as employment (Baade and Matheson 2002; Hagn and Maennig 2008), personal income or personal income per capita (Coates and Humphreys 2002), taxable sales (Baade, Baumann and Matheson 2008) and tourist arrivals (Baumann, Matheson, and Muroi 2009) have found that spectator sports have little to no measurable effect on the economy.

However, even if sporting events have minimal direct economic impact, it is conceivable that professional sports could have large indirect impacts on other measures of quality of life that are not captured by traditional economic statistics. In this paper we investigate whether sporting events have any effect on citywide violent and property crime rates.

As most studies of the direct economic impact of sports have been unable to identify significant positive benefits that would justify public subsidies, researchers have increasingly turned to the examination of the potential indirect economic benefits of sports, and it is here in which our investigation of crime finds its niche. It is reasonable to assume that sporting events or franchises may be an important source of civic pride, serve as a cultural amenity, or increase social capital in important ways. As noted by former Minnesota governor Rudy Perpich, 'Without professional sports, Minneapolis would just be a cold Omaha'. On the opposite end of the temperature spectrum, the Hawaii Tourism Authority sounds a similar note by suggesting that subsidising the Pro Bowl and local Professional Golfers Association (PGA) events improves the quality of life of the Island's residents by allowing them opportunities to watch or participate in major sporting events. (HTA 2008).

Carlino and Coulsen (2004) address whether sporting events indirectly impact the local community by examining rental housing prices in NFL cities. They find them to be 8 per cent higher than in non-NFL cities. While their methodology has been questioned, the basic finding would support the hypothesis that professional sports make cities more attractive places to live because renters are willing to pay a premium to live in NFL cities. Numerous other studies have also studied the connection between housing prices and sports (Tu 2005; Dehring, Depken and Ward 2007; Coates and Matheson 2011) with distinctly mixed results.

Others have used contingent valuation to assess the value of sporting teams and events in the absence of observable economic data. Here, too, the data is mixed. While most studies of new stadiums and arenas (Groothius, Johnson, and Whitehead 2004), professional franchises (Johnson, Groothius, and Whitehead 2001), and mega-events (Atkinson et al. 2008) find that citizens are willing to pay for sports teams and events beyond just purchasing tickets, several of the studies also demonstrate that this willingness to pay is often far less than the subsidy granted to the sports entity.

The connection between direct and indirect economic benefits is perhaps best summed up by Maennig (2007) who concludes in his ex post analysis of the 2006 World Cup in Germany that claims of 'increased turnover in the retail trade, overnight accommodation, receipts from tourism and effects on employment [are] mostly of little value and may even be incorrect. …

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