Wednesday, October 12, 2011

"It's a party, not an investment"

There's a nice article in today's Post-Dispatch about the allegedly large economic impact of the Cardinals' postseason run.  As discussed in an earlier post, the Regional Chamber and Growth Association has estimated that each game of the NLCS will add $6 million to the St. Louis economy.  But, as today's article describes, many industries are hurt by the games because activity is shifted away from them towards watching or attending the games.  These effects are usually ignored by impact studies, which makes their estimates bogus.

But even if the $6 million dollar impact is correct, and the Cardinals host the maximum number of games (9) in all three rounds of the playoffs, it is a drop in the bucket.  It might sound like a lot of money, but $54 million dollars would only be about half of a percent of total quarterly wages in St. Louis county and St. Louis city.

As reported at the end of the article, the proper perspective is provided by Allen Sanderson, a sports economist at the University of Chicago. "To the extent that you're primarily recycling money from the locals, there's really no economic impact," Sanderson said. "But that's OK … It's a party, not an investment."