Can a superstar change an economy?

Can one superstar player change a city’s economy?

A Harvard researcher says he/she can, at least if his name is LeBron James.

In a paper released today, Dan Shoag says James increases the number of restaurants and bars within one mile of where he plays by about 13%, and employment by about 23.5%.

But Shoag says the economic impact is geographically limited and drops quickly the farther you move from the arena. His research showed business increased when James returned to Cleveland, while it dropped around the arena in Miami, where James played before returning to his home state.

But he says the “superstar effect” on the economy existed in Cleveland, but not Miami.

Why ?

“Perhaps Mr. James is particularly beloved in his native Ohio. Or maybe ‘superstar amenities’ are substitutes, not complements, and Miami has plenty of them even without Mr. James, generating fiercer competition and an attenuated impact of any specific superstar,” Schoag wrote.

Shoag says the research is significant because of the public investment in sports stadiums and arenas.

But the research does little to overrule other research that shows public spending on sports facilities does little to stimulate an economy. The area surveyed consisted of only two cities, the economic impact was admittedly limited to the area near an arena, and there’s only one LeBron James.

(h/t: Sara Meyer)

  • Gary F

    How about accounting firms, architecture, and engineering offices? Software companies? Insurance companies? Law offices?

    Jobs that pay good and have benefits. Not just restaurants.

  • AL287

    Harvard has fallen down a few pegs on the ladder if this is what is coming out of their research departments.

    We’ve already had the debate about whether states should pitch in on funding professional sports stadiums and who should have access to the premium box seats and season tickets.

    • BJ

      Researching to find out if the result of a debate is valid or if assumption hold true is also important. Sometimes we find that our beliefs are not true.

  • Zachary

    There was some discussion back during the NHL strike about the economic impact to the area around the X, IIRC it was negative only to the bars/restaurants in the immediate area, but had little on the overall health of downtown St Paul.