Presentation on theme: "BRUCE K. JOHNSON, PETER A. GROOTHUIS AND JOHN C. WHITEHEAD JOURNAL OF SPORTS ECONOMICS 2001 2: 6 DOI: 10.1177/152700250100200102 The Value of Public Goods."— Presentation transcript:
BRUCE K. JOHNSON, PETER A. GROOTHUIS AND JOHN C. WHITEHEAD JOURNAL OF SPORTS ECONOMICS 2001 2: 6 DOI: 10.1177/152700250100200102 The Value of Public Goods Generated by a Major League Sports Team: The CVM Approach Jiaxin Wang Mar.6 th Sport Finance
Introduction This article reports an application of the contingent valuation method (CVM) to measure the value of public goods generated by a professional sports team, the Pittsburgh Penguins of the National Hockey League. Focusing on two questions: How valuable are the public goods generated by major league sports teams, and how widely are these public goods consumed by a citys population?
Background of Penguins Declared bankruptcy and and almost left Pittsburgh Too important to Pittsburgh to allow them to leave A local group took over the team and promised to keep the Penguins in Pittsburgh. An ideal background: What are the Penguins worth to Pittsburgh?
Survey Questionnaire: how many games? How often discuss? Quality of life? Two scenarios: leave & publicly owned at a cost to taxpayers.
Empirical Model The Empirical procedures are used to determine what portion of WTP is for public goods and what portion is for private goods. WTP = f($TAX, INCOME, USE, GAMES, WATCH, PUBGOOD, STANCUP, CELEBRATE, WINDSHIELD, D)
Conclusion Major league sports teams generate widely consumed public goods for the residents of their cities. People would be willing to pay for hockey-related public goods rather than lose them. However, the value of public goods generated by major league sports teams may not be large enough to justify the large public subsidies