For the second time in team franchise history, the Baltimore Ravens are going to the Super Bowl. That sentence has such a wonderful ring to it that it’s worth repeating. For the second time in team franchise history, the Baltimore Ravens are going to the Super Bowl. Moreover, the Raven’s path to Super Bowl involved three “win or go home” playoff games against formidable opponents. So, aside from civic pride and serious bragging rights—that’s right Patriots, Broncos, and Colts—are there any economic impacts associated with playoff appearances and Super Bowl appearances? Fortunately, these questions have been answered by other economists. And the answer is yes, there are.
In the past, many economic impact analyses focused on the economic benefits accruing to the host city, be it a playoff game or the Super Bowl. While there is some contention that the economic impacts may not be as great as civic boosters would suggest, there are some. However, an area that has only been recently examined is whether or not there any economic benefits for cities with teams in postseason play that are not hosting any postseason games.
For teams in the postseason play, there are some economic benefits. Not so obvious is that these benefits may be driven by psychological factors. Some studies have indicated that postseason appearances actually increase productivity. An early study in this field determined that victories by the home team actually resulted in increased production, while losses resulted in increased workplace accidents. Because of the timing of postseason play, a winning season may result in increased holiday spending by the fans. Finally, there is some evidence that charitable giving is higher in cities as a result of postseason appearances.
While it is great that a city’s team is in postseason play, are there any additional economic impacts associated with winning the Super Bowl? Arguably, the spending by fans on home team sports paraphernalia related to postseason play would have been money spent in the region anyway. And the increase in income by those vendors is probably matched by decreases in other vendors. However, according to a study by Dr. Coates and Dr. Humphreys at UMBC, there is a one-time gain in per capita personal income of about $140.
While the economic benefits are not driven by increased hotel activity, restaurants, and paraphernalia as Baltimore is not hosting the Super Bowl, Baltimoreans will be more productive, less prone to workplace accidents, give more to charities and have spent more money over the holidays as a result of the Ravens postseason play. When the Ravens win the Super Bowl, Baltimoreans may even see an increase in personal income. Regardless of these economic benefits, it still will be great to see a sign on I-95 reading, “Welcome to Baltimore, home of the two-time Super Bowl Champions, the Baltimore Ravens!”