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Good Lines on Economic Impact of the Super Bowl

2012 October 30
by Skip Sauer

We’ve been over the logic and the figures on the economic impact from sports ad infinitum.  But this piece by Joe Eskenzai at SF Weekly, with an assist from USF economist Phil Porter, is worth your attention.  Eskenazi provides a pithy statement detailing why two methods of estimating the economic impact of events like the Super Bowl come to starkly different conclusions.  One method, preferred by the NFL and served up by consultants, tallies the estimated spending from visitors in town for the game.  A second method practiced by academic economists compares public measures of spending in the city with the game, versus spending in the city without the game, based on historical statistics.  Over a great many events, the latter method always and everywhere yields an estimate that’s a small fraction of the former, at best.  Why?  Here’s Eskenazi (and Porter):

[M]easuring the number of people who head to a Super Bowl city for the game is a straightforward endeavor. Measuring the number of people who stay away from an overpriced, tourist-infested zoo is not. Especially in a year-round tourist destination like the Bay Area, Super Bowl visitors aren’t flocking to hotels that would otherwise be empty; they’re displacing would-be visitors. What’s more, hotels in many Super Bowl cities triple their rates and insist on multiday packages. This drives away non-Super Bowl visitors and also leads to fans booking rooms for more days than they’ll actually use — meaning those rooms aren’t being occupied by actual people who could be spending actual money.

To claim an economic windfall based on visitor numbers without factoring in those who avoid the area or are pushed out “is like going to the hen-house, counting all the foxes, and saying ‘Look at the economic impact of all these foxes here eating!’” Porter says. “You’re not counting all the hens who are gone.”

Capiche?

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