Market Power

Musings by an academic economist on the power of markets and the power over markets.

Wednesday, October 27, 2004

Another Thought on Sports Teams and their Facilities

Dennis Coates and Brad Humphreys have written a paper on the purported economic benefits of a new MLB team in D.C. Their argument is not surprising - it won't do anything to the local economy and may end up harming it slightly.

The last paragraph of the paper starts thusly:

"A baseball team in D.C. might produce intangible benefits. Residents might have an enhanced sense of community pride and another opportunity to engage in shared experience of civic expression."

Coates and Humphreys emphatically state that this is no reason for public subsidization.

Such external benefits are sometimes held up as reasons for small subsidies for teams and stadiums. But what if the team is horrible? Is there a lot of civic pride around the Tampa Bay area for the Devil Rays? The Arizona Cardinals are playing competitive football this year, but they are still 2 and 4. Baylor University is a fine university, but the Bear football program is a perennial doormat in the Big 12 and it is the only team in the Big 12 south division to *NOT* beat a Big 12 North foe this year. In contrast, the other 5 Big 12 South division teams have yet to lose a game against a North division team. Is there a lot of civic pride for the football Bears?

Of course, some fans may take masochistic pride in their team's second-class standings. Goats anyone?

Thanks to Skip Sauer's blog for the heads up.