Do Local Businesses Benefit from Stadiums? The Case of Major Professional Sports League Arenas Timur Abbiasov1 and Dmitry Sedov2 1Department of Economics, Columbia University, New York, USA 2Department of Economics, Northwestern University, Evanston, USA July 11, 2021 Abstract Stadium construction, which can cost hundreds of millions of dollars, is often subsidized by public sources. In many cases, subsidies are allocated on the premise that sports venues benefit the local economy by bringing new customers to nearby businesses. To pin down the size and the spatial distribution of such spillovers, we use daily foot traffic data covering major sports league arenas and the surrounding commercial establishments. By employing the fixed effects and the IV estimation strategies, we show that the spillover benefits are heterogeneous across sports and business sectors. We find that 100 baseball stadium visits generate roughly 29 visits to nearby food & accommodation businesses and about 6 visits to local retail establishments. While the estimates for football stadiums are comparable, basketball & hockey arenas do not appear to generate significant spillovers for the surrounding businesses. Using our spillover estimates, we also compute an upper bound on the additional local spending induced by each sample arena. The median value of the additional spending turns out to be substantially smaller than the corresponding stadium subsidy. Keywords: Stadiums; Spatial Spillovers; Establishment-level data. JEL codes: H23, R58, Z20. E-mail addresses:
[email protected] (T. Abbiasov),
[email protected] (D. Sedov) Corresponding author: Timur Abbiasov, Department of Economics, Columbia University, 420 West 118th Street, New York, NY 10027 1 Do Local Businesses Benefit from Stadiums? T.