Market Power

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

Saturday, February 19, 2005

Someone Gets It!

This morning's cat box liner had a letter to the editor from a fella in St. Peter about stadiums. The fella, Ron Arndt, gets it - almost.

I have read two of Andrew Zimbalist's books on the economics of major league sports. He is professor of economics at Smith College and considered the top person in his field.

On Page 125 of his book, "May the Best Team Win," he stated the following, "Every independent economic analysis on the impact of stadiums has found no predictable positive effect on output or employment. Some studies have even concluded that there is a possible negative impact. Why? In St. Louis, the baseball team accounts for around 0.3 percent of the local economic activity."

My point is simply this. The Minnesota Legislature should not be wasting time on discussions about privately-owned sports teams and their facilities.

That 0.3% quoted above represents gross spending on the Cardinals. If the Cardinals folded, the St. Louis economy would not contract by 0.3% (and the Cubs *still* wouldn't be able to consistently win the division) but by a smaller amount because most of the spending on the Cards will be spent in other areas of the city. Heck, the economy may even expand a small bit.