The benefits of a winning sports team?

by on September 10, 2008 at 7:08 am in Sports | Permalink

The consistently interesting Drake Bennett writes:

…a few scholars have started to suggest that there may indeed be another
kind of benefit from big-time sports. There’s a catch, though: the team
has to be good. In a forthcoming paper, economist Michael Davis and the
psychologist Christian End say that having a winning NFL football team
increases the incomes of the people who live and work in its hometown
by as much as $120 a year. And while the study doesn’t identify exactly
what causes the boost, the authors point to psychological literature
suggesting that winning fans are at once harder workers and bigger
spenders. In short, buoyed by the team’s success, we work longer hours,
take bigger risks, and shop more avidly, all of which helps the local
economy.

I have a simple hypothesis.  Winning sports team cause local fans to feel better and thus to spend more money.  Most importantly, consumption tends to be local and thus the spending shows up in the city of the winning sports team.  Saved funds, in contrast, are invested but banks and securitization make these funds mobile.  Savings will help the national or international economy but not the local economy so much.

Since more savings would be desirable, the best outcome is if no team wins, if a small city team wins, or if the victory is uninspiring.  Detroit vs. San Antonio, anybody?  That’s what the American economy needs.

Alternatively, you might think that the economic boost comes from greater confidence, higher labor supply, and other supply-side effects.  Then you should root for the teams from the largest cities (Los Angeles, New York, Philadelphia) and most of all you should root against the Washington Wizards.

San Antonio Lawyer September 10, 2008 at 7:18 am

Winning sports team are simply morale boosters,people suddenly became inspired and generous by working and spending much.

Robin Hanson September 10, 2008 at 8:06 am

But I just read a study that says that people who feel better do not in fact spend more.

Zamfir September 10, 2008 at 8:33 am

I don’t see why this sort of economic growth is automatically a benefit. If people work longer hours and spend the extra cash, they are gaining some goods which shows up in the statistics, and losing free hours that where not in the statistics.

Presumably, they valued that free time basically the same as the goods, so there is no clear gain. the best you can say is ‘a winning sports team make people value stuff over free time’.

Bill Nichols September 10, 2008 at 8:55 am

Perhaps they have the causality backwards and wealthy cities are more able to afford winning teams.

dWj September 10, 2008 at 10:18 am

As a Packers fan, I strongly agree with whatever your argument was for cheering for small-town teams.

Playoffs September 10, 2008 at 10:48 am

The effect is small; if we’re talking successful teams, hosting one playoff game could be the cause of slight bump we see here.

Bernard Yomtov September 10, 2008 at 12:05 pm

tiedemes and Bill Nichols have it, I think.

Would anyone argue that putting a lot of high-end luxury stores in a city makes that city rich?

Josh Wright September 10, 2008 at 2:09 pm

I know i would be interested to go see a football team if they were good. People love to jump in the bandwagon when they see potential in a good team. And when the fans come to see, here comes the fans with the funds . When football teams win more people spend more. I play college football and things like this there.

k September 10, 2008 at 9:10 pm

Hmm. How about the no-brainer explanation that cities with higher income have also richer teams that are able to attract more talented players?

Detroit Red Wing 3 Stanley Cups in 10 years
Detroit Tigers. 2006 ALC.
Detroit Shocks WNBA Championship 2006.
Detroit Pistons. 6 semifinal in 6 years and one champiomship.
So Detrot must be the richest country in the USA
Detroi , San Antonio? Uninspiring for you maybe
. That was real basketball

bcw210 September 16, 2008 at 5:25 am

I’m a bit late to this party, but for what it’s worth:

Tiedemies, Bill Nichols and Bernard Yomtov, you obviously aren’t sports fans. Much to its credit, the NFL (which this study was based on) is a well-run league that, unlike Major League Baseball and the European soccer leagues, manages its revenue-sharing well, and therefore is not dominated by large-market teams. Check the standings over any recent five year period and the parity will jump out at you – going from last to first, or vice versa, is quite common. Wealthy cities can’t buy their way into NFL the playoffs – the salary cap means that everyone spends just about the same on their players. Salary cap management, not revenue, is probably the biggest determinant of success.

Even in the absence of a decent revenue-sharing and salary cap arrangement, it’s hard to see how per capita wealth would affect a team’s success – other sports leagues tend to be dominated by cities with larger television markets, not necessarily high per capita income.

Dayton Lawyer January 2, 2009 at 1:02 am

What an interesting hypothesis! I agree with the author that when people feel good, they are more likely to spend more money.

花東旅遊 January 11, 2009 at 7:46 am

good

دردشة February 5, 2009 at 6:29 am

thaanks”

tina May 15, 2009 at 8:50 pm

they will get more money

flower May 15, 2009 at 8:57 pm

all the same for our watching

müzik dinle October 5, 2010 at 2:08 pm

سلم على الأهل والأحباب راجيا من الله أن يكونوا بخير. ماهي أخبارك؟ أتمنى أنك بأحسن الأحوال. هل من جديد؟ يسعدني أن أكتب لك هذه الرسالة راجيا من الله أن تلقاك بألف خير. بسم الله الرحمان الرحيم. müzik dinle السلام عليكم ورحمة الله وبركاته. مع السلامة Ùˆ في رعاية الله. إن شاء الله تعالى. الحمد لله رب العالمين. سلم على الأهل والأحباب راجيا من الله أن يكونوا بخير. ماهي.müzik أخبارك؟ أتمنى أنك بأحسن الأحوال. هل من جديد؟ يسعدني أن أكتب لك هذه الرسالة راجيا من الله أن تلقاك بألف خير. بسم الله الرحمان الرحيم. السلام عليكم .dinle ورحمة الله وبركاته. مع السلامة Ùˆ في رعاية الله. إن شاء الله تعالى. الحمد لله رب العالمين.

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