HICKS: Field research sheds light on Super Bowl impact

It is never too early to expose children to the varied and exciting world of research. As it happens, I published a study of the economic impact of a Super Bowl on host cities in 2008 and have since updated some of the calculations. With that on my mind, my two sons and I headed to Indianapolis’ Super Bowl Village recently for some field research. This was, of course, purely research and not designed for lesser forms of amusement. The splendid weather was purely coincidental in my decision to observe firsthand some of the Super Bowl activities.

So 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 for the year the game was hosted—controlling for many factors including things that don’t vary over time (like the propensity for Miami to have better weather in February than Detroit). The model told me we could expect an economic impact in the range of $325 million to $415 million in the Indianapolis metropolitan area.

While that figure was consistent with other studies, it surprised me a bit. Previous work alerted me to the concern that Super Bowl impacts are much smaller than expected because the game simply displaces other sources of revenue. In updating my study, I took that into account and ran a statistical model separating the first Super Bowl in a city from subsequent games. My result was eye-opening: The economic impact was largely unchanged from my first study, but it was only applied to the first game held in each city. Subsequent games had no effect on a city’s economy. Why?

Super Bowl XLVI provided an answer. Since the announcement that Indianapolis would host the NFL championship game, state and city officials, tourism leaders and—most important—the private sector have planned, advertised and built this into a Super Bowl-ready city. At the same time, these folks have been filling local meeting space 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 city’s destination status. But once it achieves such heights, another Super Bowl displaces one of these large events that would otherwise occur there. In many places, the spike in visitors would not have occurred without the Super Bowl buildup. Still, that begs the question of how well Indianapolis has prepared.

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 was simply astonishing. That, along with the new construction and physical improvements downtown, makes me believe Super Bowl weekend will long be remembered for changing Indianapolis for the better.•

__________

Hicks is director of the Center for Business and Economic Research at Ball State University. His column appears weekly. He can be reached at cber@bsu.edu.