Public Financing of Professional Sports Facilities and Drug Asset Forfeiture

Abstract

Local governments provide many crucial services from limited budgets, yet often subsidize the profitable, private businesses in professional sports leagues in the United States. Policing represents one important public service. Policing typically constitutes large portions of government budgets and also generates revenue through fines and forfeitures. Existing evidence suggests that large municipal expenditures in other areas can have an ambiguous effect on policing outcomes. This paper addresses the question of whether large public expenditures on sports facilities affect drug asset forfeiture using two-way fixed effects (TWFE) and generalized dynamic model specifications (GDMS). The results are similar across estimation methods, with static TWFE results suggesting a treatment effect of $1,274–5,589 in additional forfeiture per million in subsidies and results from the newer GDMS estimators suggesting $7,703 per million in subsidies. The results imply that, beyond generating no tangible local economic benefits, public subsidization of sports facilities also leads police to make up budget shortfalls by more aggressive policing, which has important implications for racial equity.

Keywords

Sports facility subsidies policing revenue public finance asset forfeiture

Get full access to this article

View all access options for this article.

References

Baade

R. A.

Matheson

V. A.

. 2014. “Financing Professional Sports Facilities.” In Financing Economic Development in the 21st Century (pp. 337–356). Routledge. https://www.taylorfrancis.com/chapters/edit/10.4324/9781315704326-24/financing-professionalsports-facilities-robert-baade-victor-matheson

Block

2021. “Professional Sports and Crime: Do Professional Hockey Games Increase City-Level Crime Rates?” Crime & Delinquency 67 (12): 2069–2087.

Borusyak

Jaravel

Spiess

. 2021. “Revisiting event study designs: Robust and efficient estimation.” arXiv preprint arXiv:2108.12419 .

Bradbury

J. C.

Coates

Humphreys

B. R.

. 2022. “The impact of professional sports franchises and venues on local economies: A comprehensive survey.” Journal of Economic Surveys 37 (4): 1389–1431. doi:https://doi.org/10.1111/joes.12533.

Callaway

Goodman-Bacon

Sant’Anna

P. H. C

. 2021. “ Difference-in-differences with a continuous treatment .” arXiv. doi:https://doi.org/10.48550/ARXIV.2107.02637

Callaway

Sant’Anna

P. H.

. 2021. “Difference-in-differences with Multiple Time Periods.” Journal of Econometrics 225 (2), 200–230. doi:https://doi.org/10.1016/j.jeconom.2020.12.001

de Chaisemartin

d’Haultfoeuille

. 2020. “Two-way Fixed Effects Estimators with Heterogeneous Treatment Effects.” American Economic Review 110 (9): 2964–2996.

de Chaisemartin

D’Haultfoeuille

. 2022, March. “Difference-in-differences estimators of intertemporal treatment effects (Working Paper No. 29873).” National Bureau of Economic Research, doi:https://doi.org/10.3386/w29873

Goldman

Kaplan

D. M.

. 2018. “Comparing Distributions by Multiple Testing Across Quantiles or cdf Values.” Journal of Econometrics 206 (1): 143–166.

10.

Goodman-Bacon

2021. “Difference-in-differences with variation in treatment timing.” Journal of Econometrics 225 (2): 254–277.

11.

Graham

S. R.

Makowsky

M. D.

. 2021. “Local Government Dependence on Criminal Justice Revenue and Emerging Constraints.” Annual Review of Criminology 4 (1): 311–330. doi:https://doi.org/10.1146/annurev-criminol-061020-021824

12.

Imbens

G. W.

2021, August. “Statistical Significance, p-Values, and the Reporting of Uncertainty.” Journal of Economic Perspectives 35 (3): 157–174. doi:https://doi.org/10.1257/jep.35.3.157

13.

Makowsky

M. D.

Stratmann

Tabarrok

. 2019. “To Serve and Collect: The Fiscal and Racial Determinants of law Enforcement.” The Journal of Legal Studies 48 (1): 189–216. doi:https://doi.org/10.1086/700589

14.

Pyun

2019. “Exploring Causal Relationship Between Major League Baseball Games and Crime: A Synthetic Control Analysis.” Empirical Economics 57: 365–383.

15.

Pyun

Humphreys

B. R.

Khalil

. 2023. “Professional Sports Events and Public Spending: Evidence from Municipal Police Budgets.” Journal of Sports Economics 24 (1): 73–96.

16.

Sant’Anna

P. H.

Zhao

. 2020. “Doubly Robust Difference-in-Differences Estimators.” Journal of Econometrics 219 (1): 101–122. doi:https://doi.org/10.1016/j.jeconom.2020.06.003

17.

Shaw

T. M.

2015. The Ferguson Report: Department of Justice investigation of the Ferguson Police Department. New Press, The.

18.

Sun

Abraham

. 2020. “Estimating dynamic treatment effects in event studies with heterogeneous treatment effects.” Journal of Econometrics 225 (2): 175–199.

Supplementary Material

Please find the following supplemental material available below.

For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.

For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.

0.00 MB

0.12 MB