Cost Benefit Analysis

1
Cost Benefit Analysis

• Should Taxpayers Subsidize a Stadium for the
  Chargers?

2
What are the Direct Benefits?

• More local spending if (1) residents spend more
  or (2) attract non-residents to the area
• Part of increased spending could be substituted
  from other area.
• Jobs increase only if at less than full
  employment and workers live in the area
• Sports comprise only 0.75 of local private
  sector payrolls

3
What are the Indirect Benefits Cost?

• Negative externalities
• Traffic, congestion, crime typically capitalized
  into home prices
• Positive Externalities
• Intangible benefits of having a team or city
  profile
• No evidence of increased financial gains to
  cities
• Other Costs
• What could have done with the land?
• What is the opportunity cost of paying off the
  bond, etc.?
• Is there a justification for subsidy? Positive
  externality or public good?