Michael J. Hicks is the director of the Center for Business and Economic Research and an associate professor of economics in the Miller College of Business at Ball State University. His column appears in Indiana newspapers.
It is never too early to expose children to the varied and exciting world of research. As it happens, in 2008 I published a study of the economic impact of a Super Bowl on host cities, and have since updated some of the calculations.
So, with this on my mind, my two sons and I headed to the Super Bowl Village for some field research.
This was of course, purely research oriented, and not designed for lesser forms of amusement. The splendid weather was purely coincidental in my decision to observe first-hand some of the Super Bowl activities. What did I find out?
In my 2008 study I built a statistical model of all Super Bowl cities from 1969 through 2007, and estimated the increase in economic activity occurring in the year the game was hosted when controlling for many other factors including things that don’t vary over time (like the propensity for Miami to have better weather in February than Detroit).
This statistical model told me that we would expect impacts in the range of, say, $325–$415 million impact in the Indianapolis metropolitan area. While this figure is consistent with a lot of other studies, it surprised me a bit.
Previous work alerted me to the concern that Super Bowl impacts are much smaller because the game will simply displace other sources of revenue. In updating my study, I took this concern into account and ran a statistical model that separated the first Super Bowl in a city from subsequent games. My result was eye-opening.
The impact size was largely unchanged from my first study, but the impacts were all clustered in the first game held in each city. Subsequent games, in later years had no effect on a city’s economy. Why is this?
Living in such proximity to the Indianapolis Super Bowl provided an answer. Since the announcement that Indianapolis would host the Super Bowl, state and city officials, tourism officials, and most importantly the private sector have planned, advertised and built this into a Super Bowl-ready city.
At the same time these folks have been filling the convention center and hotels with new conventions, promotional events and the like over the coming years.
For a community that does this well, the Super Bowl elevates the destination status of the city to new heights. Once there, a second or follow-on Super Bowl’s simply displace one of these large events that would otherwise occur there.
In many places the big spike in visitors would not have occurred if the city hadn’t gone through the preparatory experience of a Super Bowl. Still, that begs the question, how has Indianapolis done in preparation?
The Hicks boys were quite impressed. While we don’t have enough green candy to go to the game itself, the readiness of the city for the swarms of crowds descending on Indianapolis is simply astonishing. This along with the new construction and physical improvements makes me believe this weekend will long be remembered for changing Indianapolis for the better.