As a person whose state is currently embroiled in a debate over whether (and, more likely, how) the public should pay for a private company to build its new facilities, I found this quote from a 2000 issue of the Journal of Economic Perspectives to be particularly interesting:
Few fields of empirical economic research offer virtual unanimity of findings. Yet, independent work on the economic impact of stadiums and arenas has uniformly found that there is no statistically significant positive correlation between sports facility construction and economic development.
These results stand in distinct contrast to the promotional studies that are typically done by consulting firms under the hire of teams or local chambers of commerce supporting facility development. Typically, such promotional studies project future impact and almost inevitably adopt unrealistic assumptions regarding local value added, new spending, and associated multipliers.
There are three key lessons that this study highlights:
1. When you can get it, empirical data—that is, information gathered from real-life experimentation or observation—is better than projections.
2. Research done by independent analysts is better than research done by people who are being directly paid by clearly biased interests.
3. No matter how many times your football team says otherwise, a new football stadium is unlikely to be a good investment for public tax money.