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The Value of Public Goods Generated by a Major League Sports Team: The CVM Approach

The Value of Public Goods Generated by a Major League Sports Team: The CVM Approach . Bruce K. Johnson, Peter A. Groothuis and John C. Whitehead Journal of Sports Economics 2001 2: 6 DOI: 10.1177/152700250100200102 . Jiaxin Wang Mar.6 th Sport Finance. Introduction.

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The Value of Public Goods Generated by a Major League Sports Team: The CVM Approach

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  1. The Value of Public Goods Generated by a Major League Sports Team: The CVM Approach Bruce K. Johnson, Peter A. Groothuis and John C. Whitehead Journal of Sports Economics 2001 2: 6DOI: 10.1177/152700250100200102 Jiaxin Wang Mar.6th Sport Finance

  2. Introduction This article reports an application of the contingent valuation method (CVM) to measure the value of public goods generated by a professional sports team, the Pittsburgh Penguins of the National Hockey League. Focusing on two questions: How valuable are the public goods generated by major league sports teams, and how widely are these public goods consumed by a city’s population?

  3. Background of Penguins Declared bankruptcy andand almost left Pittsburgh Too important to Pittsburgh to allow them to leave A local group took over the team and promised to keep the Penguins in Pittsburgh. An ideal background:What are the Penguins worth to Pittsburgh?

  4. Survey Questionnaire: how many games? How often discuss? Quality of life? Two scenarios: leave & publicly owned at a cost to taxpayers.

  5. Empirical Model The Empirical procedures are used to determine what portion of WTP is for public goods and what portion is for private goods. WTP = f($TAX, INCOME, USE, GAMES, WATCH, PUBGOOD, STANCUP, CELEBRATE,WINDSHIELD, D)

  6. EmpiricalResults

  7. Policy Implications

  8. Conclusion Major league sports teams generate widely consumed public goods for the residents of their cities. People would be willing to pay for hockey-related public goods rather than lose them. However,the value of public goods generated by major league sports teams may not be large enough to justify the large public subsidies

  9. Thanks!

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