Party time: the DNC might not deliver the dollars promised, but publicity will be priceless.

• Author: Dunn, Erin
• Position: FEATURE

With about 35,000 people expected to visit Charlotte next month for the Democratic National Convention, city leaders hope to leverage the benefits of the political spectacle past the four days it's in town. Measuring the economic impact of political conventions is a tricky equation, with different inputs and outputs depending on who's doing the calculating. The event should give the region a shot in the arm, injecting $150 million or more in benefits, organizers say. But such sums are vastly overstated, according to a 2008 study that analyzed both parties' national conventions from 1972 to 2004. "What we found is we can't identify any significant economic impact from the conventions being in town," says Victor Matheson, associate professor of economics at College of the Holy Cross in Worcester, Mass., one of three authors.

A major reason: loss of business from the conventions' "crowding-out effect." For example, when the DNC came to Boston in 2004, it displaced a U.S. gymnastics event and a boating festival, which would have brought in more than $110 million, according to Beacon Hill Institute at Suffolk University in Boston. Economists there calculated the convention's impact at only $14.8 million--far below the official estimate of $154.2 million. Crowding-out could be more pronounced in Charlotte because of the city's size, Matheson says. "A large number of delegates can fill up Charlotte a lot faster than New York City." But if a convention is held outside a city's peak tourism season, it displaces fewer visitors, he says. During the past decade, hotel occupancy in September has averaged 62.5%, making it Charlotte's eighth-busiest month.

Mayor Anthony Foxx believes you have to look closer to home to predict what the Democratic...