The Impact of Sports Stadiums on Localized Commercial Activity: Evidence from a Business Improvement District
37 Pages Posted: 6 Aug 2020
Date Written: July 8, 2020
Local government funding of sports stadiums is frequently justified as stimulating economic activity despite consensus contrary findings in the academic literature. Though some studies have identified positive neighborhood effects from stadiums on nearby residential property, scant research exists on highly-localized commercial activity that is hypothesized to spur development. This analysis exploits the recent relocation of a professional baseball team from downtown Atlanta to a pre-existing Georgia Business Improvement District (Community Improvement District or CID) in suburban Cobb County to estimate the impact of the stadium development on commercial property values. The existence of multiple CIDs in the metro-Atlanta area provides the opportunity to estimate a counterfactual comparison absent the stadium to draw causal inference regarding the stadium’s impact on economic activity using the synthetic control method. Estimates indicate that the stadium decreased commercial property values in the district, which is consistent with past studies that find little to no positive impact on economic activity. The results indicate that previous findings of positive impacts on residential property may not be applicable to commercial activity.
Keywords: Economic Development, Property Values, Sports Stadiums, Business Improvement Districts, Synthetic Control Method
JEL Classification: H71, L83, R58, Z23
Suggested Citation: Suggested Citation