Munich Personal RePEc Archive

When can economic impact be positive? Nine conditions that explain why smaller sports can have bigger impacts

Agha, Nola and Rascher, Daniel (2013): When can economic impact be positive? Nine conditions that explain why smaller sports can have bigger impacts.

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Abstract

This explanatory research reviews the economic impact literature to identify the conditions that would theoretically allow any sport, large or small, to generate positive economic effects. Nine conditions are identified that, when present, could allow a community to experience a positive economic impact from a team or stadium. The nine conditions are then used to explain the discrepancy in known empirical outcomes in Major and Minor League Baseball. It appears as if major league teams are more likely to violate the conditions while minor league teams are not. This research finds theoretical support for previous suggestions that smaller teams and events may be beneficial to local economies. In doing so, it also explains previous empirical results that found some minor league baseball classifications are associated with positive gains in per capita income.

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