Last month’s Super Bowl was hampered by severe winter weather that dumped significant accumulations of snow and ice on the Dallas Metroplex, the host of this year’s game. At the risk of being contrarian just be be contrarian, could the snow have actually increased in the economic impact of the game on the Dallas area? It is quite reasonable to predict yes.
The snow closed the DFW airport and kept many fans from getting to the game until just the day before curtailing the number of visitor days and reducing the gross impact of the game. Of course, the economists here at TSE constantly note that it is net economic impact that must be measured, and the storm would have significantly reduced economic activity anyway. If Super Bowl fans were more motivated to get to Dallas than the casual visitors they replaced, the storm could actually have increased net economic activity in the area. Consider this simple numerical example.
Suppose in a normal weekend Dallas gets $300 million in tourism income while during the Super Bowl tourist income rises to $360 million, all of which comes from sports fans who crowd out any other type of visitor. The economic consultants would place a $360 million economic impact on the Super Bowl due to the spending by Super Bowl visitors, but the economists here would attribute only the $60 million increase to the Super Bowl since the sports fans displace regular tourists.
Now suppose a major blizzard hits Dallas and that normally most tourists would be dissuaded from coming to the city reducing economic spending by tourists to $60 million. Now assume Super Bowl visitors are a hardier lot (due, perhaps, to expensive, non-refundable game tickets or the once-in-a-lifetime chance to see the beloved home team in the big game). The weather still keeps some people away and shortens the trip for others reducing total spending by Super Bowl fans to $180 million.
The economic consultant would cry in despair that the blizzard has reduced the economic impact of the game by 50% to a mere $180 million. Here at TSE we would note that absent the Super Bowl almost nothing would have gone on in Dallas that weekend, and even the sparse crowds are way higher than they would have been otherwise. The net economic impact of the game has actually doubled to $120 million. Essentially, the Super Bowl served to salvage what would have been an utter economic disaster for the tourism sector.
Perhaps the NFL should be required to host the Super Bowl exclusively in cold weather cities, and then we should all hope for the worst.
Professor Vic,
At the risk of missing an obvious tonge in cheek, you don’t actually mean your last line. Obviously the hope would be for the best weather at all times (NYC would undoubtedly benefit economically from year-round LA weather), with the SB (and perhaps other sporting events) providing partial insurance against against a bad weather draw. Good weather strictly dominates bad.
Cheers!
My son and I went to SB 34 in Atlanta and had to deal with an ice storm so bad the teams canceled their walk-throughs the day before the game. We also went to SB 36 in New Orleans where the weather was warm enough for t-shirts.
Maybe it was just Mardi Gras and the French Quarter, but we spent a lot more money in New Orleans than Atalanta.
Ron,
Actually, it is unlikely that NYC would benefit from permanently having weather like LA. In the spatial equilibrium models from urban economics, consumption amenities like nice weather weather *reduce* real wages. They drive up in-migration and housing prices, and in equilibrium workers are willing to accept lower nominal wages because of the amenity value of the weather.
Brad