Economic Impact of the Rose Bowl

Tomorrow the University of Wisconsin Badgers football team plays the Texas Christian University Horned Frogs in what is referred to as the "Grand-daddy of them all" bowls - the Rose Bowl in Pasedena California. In a blog a few years ago, an LA Times writer looks into the economic impact of the Rose Bowl.

In the blog, we see that there are varying estimates of the economic impact of the Rose Bowl. Some studies show that the economic impact is over $58 million from direct and indirect results. Dave Berri - my friend and co-author - is quoted as saying that these studies significantly over-estimate the economic impact of sporting events. This is true, but those studies are primarily based on the following type of measure: economic impact with the event versus the economic impact without the event. So with the Superbowl an independent investigator can show that economic impact - measured such in city/county/state taxable sales revenues - a year(s) before the Superbowl and year(s) after the Superbowl in an individual city do not show much of a difference. Hence the conclusion that the Superbowl does not have much of an economic impact.

Why - simple - substitution effects. In other words, individuals who value attending the Superbowl take the place of those who do not. For individuals living in the city and attending the Superbowl, they spend their income for this attraction instead of spending it on other local goods or services. Thus there is not much of an economic impact of large movable sporting events like the Superbowl.

But what about the Rose Bowl? In other words the methodology used for the Superbowl would not work for the Rost Bowl, since it occurs on the same day for over 100 years. I suppose one could look at a similar city in California and track taxable sales between the two cities and see if there is a significant difference between the two to determine if there is any significant economic impact of the Rose Bowl or other NCAA FBS bowls that are in the same city over the same period of time. Another way of tackling this would be to look at taxable sales revenue from the traditional bowl and then looking at the taxable sales revenue from the NCAA FBS championship game in the same football venue, such as this year with the BCS "title" game held in Arizona.

Additionally, some bowls have moved from city to city - I'm thinking of the Insight Bowl - which has not always been at Arizona State University's football arena as a means to determine the economic impact of a NCAA FBS college bowl.