Do the colts add to the economy? For economic impact, the best thing would be to have no local fans.

• Author: Barkey, Patrick M.
• Position: Indiana Indicators

IT IS ALWAYS NICE TO be on the same side of an issue as your friends. Human beings are social animals, and we all like to be liked. Disagreement for many of us is unpleasant, and when those disagreements are deep-seated, they can end friendships.

For many of my friends in the business community, then, these next words will be unpleasant. Because in my cold, rational mind, I cannot find any reason why the taxpayers of the city of Indianapolis--or of the state of Indiana, for that matter--should subsidize the operations of the Indianapolis Colts.

I am a football fan on the weekends, certainly, and have personally enjoyed watching and attending Colts games. But on weekdays I am an economist, and we keep score in an entirely different game. And the argument, that having squads of professional athletes strap on helmets and knock each other around on Sunday afternoons is a boon to the local economy, has always been a difficult one to swallow.

That's what some studies of the impact of sports franchises on regional economic performance purport to show. The fact that those studies are commissioned by advocates of public underwriting of sports facilities is not, for me at least, especially troubling. If funding professional sports really produces a net gain for the economy, who else would we expect to bring that fact to our attention?

It is the assumptions that lead to that result that trouble me. The idea that spending by local residents on anything--gambling in casinos, buying cars or attending sports events--can propel the overall economy to greater heights is something of which we should all be deeply skeptical.

The overwhelming evidence in regional economics is that increases in such spending--say, as a result of a team's relocation--inevitably produces a displacement in spending on something else. In order to realistically assess how a sports team's operations impact the economy, we have to think very hard about what that "something else" is.

Unfortunately, such assessment is rare in most impact studies performed to date. They simply look at the spending by those who attend games on restaurants, parking, hotels, concessions and tickets as if it came bundled up under the Christmas tree.

It is strange, but true, that from an impact point of view, the best thing for the Colts would be to have no local fans whatsoever. If the stadium were filled in 1984 with fans who traveled here from Baltimore, then their spending could genuinely be considered as...