Special interest groups are able to have a substantial impact on the political system. Such groups can provide valuable services to individuals and to elected officials. They also can generate substantial benefits to a small minority.
- Compare the positive and the negative effects of being a host city to a professional sports team.
- Describe the opportunity costs and the resources needed to host a professional sports team.
- List the non-economic benefits of professional sports teams on a city.
- Describe subsidies on sports teams.
Elected officials, like other people, respond to incentives. Being re-elected is often an important incentive to government leaders. Re-election depends on earning votes, a scarce "good." This means that elected officials have a strong incentive to work on behalf of special interest groups that they think can be helpful in finding votes at the next election. This may occur even if the particular program they put into effect is economically inefficient.
No. 85 Sports Stadium Madness: Why It Started, How to Stop It (summary) - by Joseph L. Bast.
Group aims to put cultural component in Mizner Park: This article is about the hopes of developing Mizner Park.
Go to the Heartland Institutes web page at www.heartland.org/Article.cfm?artId=9474 . Make a list of what the author thinks are the real reasons we subsidize sports. What is the relationship between the number of team franchises and the number of cities interested in hosting them? What is the term used to describe this relationship? How do incentives work to encourage public subsidies of stadiums? What incentives might special interest groups offer to individuals? What advantages might interest groups offer to elected officials?
Have students select two articles from the following websites and evaluate the author's arguments. List the arguments for and against subsidies for stadiums. Identify biases and errors in economic reasoning.
- Steelers, Pirates to pay more for new stadiums
- Columnist Ron Cook: Plan B flawed; option is worse
- Sunday Op-Ed: Let's grow with Plan B
- Series of articles on Plan B for Pittsburgh
- FRESNO'S NEW BASEBALL STADIUM BETTER NOT BE PAID FOR WITH MUNICIPAL BONDS!
- Federal subsidies on rise for new stadiums
- Arizona announces plans for stadium
- Board to consider Plan B next month
Discuss the following questions: How do each of the following benefit from public subsidies for stadiums
- team owners and players
- construction contractors
- labor unions
- newspaper reporters, editors, and publishers
Go to www.planning.unc.edu/courses/261/narcowich/261revu.htm for arguments opponents and proponents of subsidies use citing the economic impact of sports teams on a community to justify their position.
Answer the following questions based upon the reading:
What are some of the "economic impact" arguments against the public financing of stadiums and franchises?
What are some of the "economic impact" arguments for the public financing of stadiums and franchises?
How many jobs will be created through a new infrastructure or franchise development plan according to Richard Dye?
What are some of the non-financial benefits of local professional sports franchises?
Go to www.thesportjournal.org/2002Journal/Vol5-No3/econimic-values.asp for an example of the range of estimates of the economic impact of sport franchises.
What are two crucial factors over which the controversy of economic impact is centered?
How can the multiplier effect distort the estimated impact of professional sports teams?
Apply what you have learned from the stadium issue to a debate over providing a government subsidy for the Arts.
After reading the article "Group aims to put cultural component in Mizner Park" students discuss:
- What is the nature of the subsidy sought by the Concert Hall at Minzer Park Inc.?
- What groups are likely to support/oppose government spending on a "cultural hub" at Minzer Park? Why will they support/oppose it?
- What are the proponents/opponents of government spending on a "cultural hub" at Minzer Park likely to say about its economic impact? Give examples of what you would expect both groups say.
- Do you believe the subsidy will be approved? Why or why not?
In Pennsylvania the state lottery funds programs for senior citizens. The average age of citizens in Pennsylvania is above the national average. Senior citizens tend to vote in elections.
Write an editorial on the likelihood of Pennsylvania using a new state lottery game to fund stadium construction and post it in the web conference.
Write a newspaper article or create a radio or television news report on the range of estimates and explain why economists believe the economic impact of sport franchises is small.
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