Abstract
Civic boosters generally have estimated the Super Bowl to have an impact of $300 to $400 million on a host city's economy. The National Football League has used the promise of an economic windfall to convince skeptical cities that investments in new stadiums for their teams in exchange for the right to host the event makes economic sense. Evidence from host cities from 1970–2001 indicates the Super Bowl contributes approximately one-quarter of what the boosters have promised and that the game could not have contributed by any reasonable standard of statistical significance, more than $300 million to host economies.
This paper is a revision of a paper presented at the Western Economic Association International 79th annual conference, Vancouver, 2 July 2004, in a session organized by Brad Humphreys, University of Illinois. The authors are grateful for the comments and suggestions made by session participants as well as two anonymous referees.
Notes
1. Steeg claimed that the NFL and NFL Properties spend a combined $43 million on Super Bowl XXXIV, for example.
2. At the March 1999 NFL meetings, the teams agreed to allow teams to qualify for up-front loans in an amount equal to 34% to 50% of the private contributions for stadium projects. The specific amount would be determined by the size of the project and the market the stadium would serve (NFL Citation1999a).
3. Porter's use of monthly sales receipts is important. If the researcher can compress the time period, then it is less likely that the impact of the event will be obscured by the large, diverse economy within which it took place. The use of annual data has the potential to mask an event's impact through the sheer weight of activity that occurs in large economies over the course of a year unless steps are taken to isolate the event.
4. Note that the term “multiplier” here refers to static input-output multipliers rather than the Keynesian macroeconomic multiplier based upon an economy's marginal propensity to consume.