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Value of public goods from sports stadiums: the CVM approach
Author(s) -
Johnson BK.,
Whitehead JC.
Publication year - 2000
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.2000.tb00005.x
Subject(s) - stadium , subsidy , contingent valuation , public good , valuation (finance) , economics , externality , value (mathematics) , publicity , willingness to pay , public economics , liberian dollar , business , actuarial science , marketing , microeconomics , finance , market economy , geometry , mathematics , machine learning , computer science
Many state and local governments have subsidized the construction of arenas and stadium for the use of professional sports teams. They often justify the subsidies by claiming the projects generate valuable public goods and positive externalities, though such benefits are difficult to measure. This article reports an application of the contingent valuation method (CVM) to measure the value of public goods generated by two proposed projects in Lexington, Kentucky: a new basketball arena for the University of Kentucky and a minor league baseball stadium. Neither project would generate sufficiently valuable public goods to justify public financing. Although the results cannot be generalized to other cases, they do shed light on some of the main issues involved, and they demonstrate the feasibility of applying CVM to the evaluation of the subsidized stadiums.