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Subsidies and Stadia’ Opulence

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  • Geoffrey Propheter

Abstract

Quirk and Fort’s gold plating hypothesis stipulates that subsidies are partly capitalized into stadia’ opulence. If the gold plating hypothesis is true, it would indicate that subsidies contribute to their own existence, as owners and major league executives argue subsidies are necessary to meet leagues’ increasing facility design standards. This study tests the gold plating hypothesis using a pooled cross section of stadia from the five major leagues. The findings confirm that subsidies increase stadia’ opulence. As evaluated at leagues’ mean stadia acreage, the marginal opulence of an additional US$1 million construction subsidy ranges from US$188,490 to US$501,420 depending on the league.

Suggested Citation

  • Geoffrey Propheter, 2017. "Subsidies and Stadia’ Opulence," Journal of Sports Economics, , vol. 18(1), pages 3-18, January.
    • Handle: RePEc:sae:jospec:v:18:y:2017:i:1:p:3-18
    DOI: 10.1177/1527002514551803
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    1. Sepulveda, Cristian F., 2023. "Cost–Benefit Analysis of an “Average” Professional Sports Team or Stadium in the United States," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 14(3), pages 451-477, October.
    2. Geoffrey Propheter, 2023. "Sports Facilities as a Housing Amenity: Do Prices Follow Facilities?," Journal of Sports Economics, , vol. 24(4), pages 443-474, May.

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