LeBron James as local stimulus

by on June 17, 2017 at 1:51 pm in Economics, Sports | Permalink

Via Marc Canal Noguer:

Taking My Talents to South Beach (and Back)

Shoag, Daniel, and Stan Veuger. “Taking My Talents to South Beach (and Back).” HKS Faculty Research Working Paper Series RWP17-019, May 2017.

Abstract

We study the local economic spillovers generated by LeBron James’ presence on a team in the National Basketball Association. Mr. James, the first overall pick of the 2003 NBA draft, spent the first seven seasons of his career at the Cleveland Cavaliers, and then moved to the Miami Heat in 2010, only to return to Cleveland in 2014. Long considered one of the NBA’s superstars, he has received the league’s MVP award four times, won three NBA championships, and been a part of two victorious US teams at the Olympics. We trace the impact a star of Mr. James’ caliber can have on economic activity by analyzing the impact his departures and arrivals had on business activity close to the Cleveland Cavaliers and Miami Heat stadiums. We find that Mr. James has a statistically and economically significant positive effect on both the number of restaurants and other eating and drinking establishments near the stadium where he is based, and on aggregate employment at those establishments. Specifically, his presence increases the number of such establishments within one mile of the stadium by about 13%, and employment by about 23.5%. These effects are very local, in that they decay rapidly as one moves farther from the stadium.

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1 Thiago Ribeiro June 17, 2017 at 2:31 pm

“We find that Mr. James has a statistically and economically significant positive effect on both the number of restaurants and other eating and drinking establishments near the stadium where he is based, and on aggregate employment at those establishments.”

Why does he eat and drink so much? I know professional athletes spend much energy, but still it seems hard to believe a man alone can support an entire food ecosystem.

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2 RH June 17, 2017 at 2:34 pm

So selling more tickets to a stadium increases sales in restaurants and bars around the stadium? And the results are statistically significant, you say? Please, tell me more.

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3 Enrique June 17, 2017 at 2:34 pm

LeBron also inspired musicians. See: Yo Gotti, https://m.youtube.com/watch?v=7OhxoETH72M

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4 Dzhaughn June 17, 2017 at 2:35 pm

But look what Steph Curry did to housing prices in the bay area.

File under “Study of Noisy Metrics with Sample Size N = 1.” Or maybe N = 2 here.

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5 anon June 17, 2017 at 3:00 pm

I think the sample size is 3, or maybe 5.

The effect seems plausible. the Cavs, Heat and Cavs (again) were better teams (won more) with James than without. It seems plausible that teams that win more have more restaurant activity around the stadium than do teams that win less. However, I would expect much (all?) of this increased economic activity to be displaced from elsewhere in the community. I do not think having the Cavs win more makes people in Cleveland eat out more, so much as it makes them go to restaurants near the stadium instead of other parts of the city.

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6 msgkings June 17, 2017 at 3:11 pm

What about bringing people from outside the area like the suburbs to eat there? Or even fans of other teams? Once the Cavs or Heat are hot tickets there’s probably some net uptick in business not just shuffling it around.

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7 anon June 17, 2017 at 5:56 pm

True. Still displacement, just displacement from farther away. But, from the perspective of the local govt. it is a gain.

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8 chuck martel June 17, 2017 at 6:44 pm

Winning teams generate greater attendance and a more fervent celebratory party atmosphere, both before, and especially after, victories. Spectators tend to hit the sauce in bars and restaurants during big games and after. LeBron James himself isn’t the key, it’s the record of the team.

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9 Demosthenes June 17, 2017 at 3:16 pm

Clever marketing, but in no way the “effect of LeBron James.”

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10 Stu June 17, 2017 at 4:24 pm

Hastily made Cleveland tourism video:

https://www.youtube.com/watch?v=oZzgAjjuqZM

‘Our economy is based on LeBron James’

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11 dearieme June 17, 2017 at 6:08 pm

At least this post told which game Mr James plays.

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12 Savannah June 17, 2017 at 8:01 pm

Congratulations Tyler, on your emeritus award from the FEE conference in Atlanta, the inaugural, 7+6 is of course 13. Your presence was missed but the speech was well received.

Jimmy Wales spoke about wikitribune, a non advertising based news service meant to disrupt the inertia, corruption and laziness in news reporting.

There are 33 languages with at least 1 million speakers.

https://www.freedominthe50states.org/ Lastly, you can see that New York ranks last in freedom, a scathing indictment of cultural values in the media, art, and finance capital of the world. It perhaps has become Das Kapital.

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13 Dick the Butcher June 17, 2017 at 8:43 pm

“There are 33 languages with at least 1 million speakers.”. in India alone.

NYC is not “Das Kapital.” It’s the capital of Dumbfuhkistan.

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14 middyfeek June 18, 2017 at 6:38 am

Extending this silliness even further, what would be the effect if he were no longer allowed to play football on a basketball court?

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15 Careless June 18, 2017 at 6:48 am

I’m no fan of his, but it seems outrageous that he’s only won 4 MVPs when he was the best player for something like 10 straight years

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16 msgkings June 18, 2017 at 9:09 pm

Voters get tired of voting the same dude in year after year. Michael Jordan should have won about 3-4 more too, but they gave them to people like Charles Barkley and Karl Malone instead out of Jordan fatigue.

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17 King James June 19, 2017 at 5:52 pm

The authors do not seem to account for differences in expectations. It seems fairly obvious that attendance, and thereby local spending, wound increase if a team were forecasted to be much improved over the previous season. If, for example, Miami were to have taken a more balanced approach to increase their forecasted win total by bringing in a better coach and/or several marginally better players, would the effect be the same?

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