Value of public goods from sports stadiums: the CVM approach

Many state and local governments have subsidized the construction of arenas and stadium for the use of professional sports teams. They often justify the subsidies by claiming the projects generate valuable public goods and positive externalities, though such benefits are difficult to measure. This a...

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Bibliographic Details
Published in:Contemporary economic policy 2000-01, Vol.18 (1), p.48-58
Main Authors: Johnson, BK, Whitehead, JC
Format: Article
Language:English
Subjects:
Economic aspects
Economic policy
Evaluation
Government spending policy
Kentucky
Lexington
Policy studies
Public goods
Sports
Sports teams
Stadiums
Subsidies
U.S.A
Universities
Valuation
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Summary:Many state and local governments have subsidized the construction of arenas and stadium for the use of professional sports teams. They often justify the subsidies by claiming the projects generate valuable public goods and positive externalities, though such benefits are difficult to measure. This article reports an application of the contingent valuation method (CVM) to measure the value of public goods generated by two proposed projects in Lexington, Kentucky: a new basketball arena for the University of Kentucky and a minor league baseball stadium. Neither project would generate sufficiently valuable public goods to justify public financing. Although the results cannot be generalized to other cases, they do shed light on some of the main issues involved, and they demonstrate the feasibility of applying CVM to the evaluation of the subsidized stadiums.
ISSN:1074-3529
1465-7287
DOI:10.1111/j.1465-7287.2000.tb00005.x