Taking my talents to South Beach (and back): evidence from a superstar athlete

Abstract

We study the local economic spillovers generated by LeBron James’ presence on a team in the National Basketball Association. We find that Mr. James has a statistically and economically significant positive effect on both the number of restaurants and other eating and drinking establishments near the stadium where he is based, and on aggregate employment at those establishments. Specifically, his presence increases the number of such establishments within one mile of the stadium by about 13%, and employment by about 23.5%. These effects are very local, in that they decay rapidly as one moves farther from the stadium.

Keywords:

• Local externalities
• superstar
• sports economics
• spillovers

Acknowledgments

We thank Philip Hoxie and Hao-Kai Pai, who provided excellent research assistance. We are grateful to Jeffrey Clemens and Adam McKay for their helpful comments.

Declaration of interest

We declare no financial or organizational conflicts of interest. Shoag supports the Cleveland Cavaliers.