SECTION 3: The Economics of Sports


To answer the questions in this section, visit the Walden Library to read the following article:


  • Baade, R. A., Baumann, R. W., & Matheson, V. A. (2011). Big men on campus: Estimating the economic impact of college sports on local economies. Regional Studies, 45(3), 371–380. 
    Retrieved from the Walden Library databases.


In the article introduction, the authors give figures on the University of Minnesota’s new stadium that was built for the football team. “Although the precise line between what constitutes state and university funds is admittedly unclear when dealing with a public university, at least 55% of the new stadium was paid for with designated state funds (Baade, Baumann, & Matheson, 2011, p. 372). What is meant by the underlined phrase? Why can this not be determined precisely?


Explain why the authors used a non-sports–related event such as Hurricane Andrew to include in the comparisons of tables 3, 4, 5, and 6. Is this necessary? Is this an appropriate use of the data when focusing on the economic impact of sports in an area? 

After analyzing tax revenues throughout the state in comparison with the local area during football and basketball games, the authors state the following in the conclusion: 

The present regression analysis of taxable sales in Florida between 1980 to early 2007 fails to support these claims. Men’s basketball games at Florida State University and University of Florida were found to have no statistically significant impact on taxable sales in Tallahassee and Gainesville, respectively, and indeed, the coefficient on the variable was even negative in two of the four models (Baade et al., 2011, p. 372). 

What is meant by “statistically significant impact?” Is there money to be made on sports teams in these college towns? Who makes the money? 


You sit on a task force created to deal with an unemployment problem in these cities. Should the local community encourage the universities in these two towns to have more major sporting events as a strategy for growing the city economy? Why or why not?  

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