In this episode, we discuss the economic impact of the Super Bowl and how impact studies that claim to measure its economic benefits are often exaggerated. Politicians love to talk about the ways in which mega-events bring in a significant amount of money, but most of the benefits go to large corporations rather than the local economy. We chat about the methodology of these impact studies, discussing many methodological flaws and unrealistic assumptions. These include failing to account for money that would have been spent in the area anyway, estimates of visitors, estimates of spending, the multipliers that are chosen, and more. With the big game coming up, it’s sure to give you something to talk about in-between commercial breaks.
In this episode, we chat about the following topics:
Matt’s Dry January update
The methodology behind economic impact studies
The unspoken benefits of mega-events like the Super Bowl
Pop culture economics examples
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Some Show Notes:
We recorded this episode in January, so Matt was still in the middle of Dry January and had a virgin Moscow Mule. Since Jadrian checked in from the office after his first day of classes, he opted for a bottle of water and a Diet Coke. Our next episode will include some nice cold beverages!
Even though we weren’t drinking, we still chatted about our favorite parts of drinking in Orlando. Matt was able to check in some beers that he had at Disney World and Jadrian shared how he loves drinking a Duff Beer in the Simpsons area at Universal.
Some Show Notes:
Economic impact studies are used prominently to promote events and but have many flaws. Matt and Jadrian discuss an economic impact study for Super Bowl LVI. They discuss several problems with economic studies, including assumptions on the multiplier, double-counting the impact, determining whether the spending would have happened anyway, and more. Further, the entities hired to conduct these studies are paid to help a town promote an event and are expected to come up with a big number. The incentives are not ideal. Matt also spent some time discussing a paper he co-authored on the Guidelines for conducting economic impact studies on fracking.
This Week’s Pop Culture References:
Jadrian discussed clips on sports and economics. Abdullah Al-Bahrani and Darshak Patel wrote a great paper, “Using ESPN 30 for 30 to Teach Economics” that provides many tips. One of Matt’s and Jadrian’s favorite examples comes from ESPN’s 30-for-30 titled “Broke”.
Matt recommended the book “New Money, Staying Rich” by Phillip Buchanon on the issues athletes face when coming into new wealth. Jadrian recommended Soccernomics by Simon Kuper and Stefan Szymanski on the economics of soccer and other sports and This is your Brain on Sports.
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