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Revealing Economic Impact Numbers

According to Bloomberg/Businessweek, in preparation for the Super Bowl, Rick’s Cabaret International, a national chain of strip clubs, flew in more than 100 dancers to its Indianapolis club for a week of "nonstop party action". According to Rick's spokesperson Allan Priaulx, strippers from the company's Miami, New York, Minneapolis and Texas venues converged on Indy to take advantage of the money-making potential of the Super Bowl crowds.

The presence of imported exotic dancers actually illustrates one of the primary economic factors that reduces the economic impact of mega-events on host cities. The money earned by these out-of-town performers during Super Bowl week would be counted by consultants attempting identify economic impact since any spending at Rick's Cabaret by Super Bowl visitors would be figured into direct economic impact calculations. However, the money wouldn't be earned by Indianapolis residents but instead would immediately head out of town in the pockets (well, maybe the g-strings) of the dancers when they head home. Furthermore, the earnings would not stick in the city to be spent and respent, lowering the multiplier and any potential indirect economic impact. Yet, it is the residents of Indianapolis who are on the hook for over $600 million in public funds that spent building Lucas Oil Stadium.

Interesting economic examples pop up in the darned places. Now if I can only get my Dean to pony up some funds for a little field research...