Terror Alert Levels and Major League Baseball Attendance

Abstract

In the post-9/11 world, managers and owners of large public venues face new challenges. Since stadiums are potential targets of terrorist attacks, sports venues may experience falling ticket sales as the public becomes more concerned about the threat of terrorism. This paper estimates the risk to business disruptions by examining how baseball fans respond to increased terror-alert levels by the U.S. Homeland Security Advisory System. Using game-day attendance for each Major League Baseball team for the period 2002-03, the results indicate that during the early days of the nation's firstever increase in the terror-alert level (i.e., raised from yellow to orange) attendance decreased by as much as 12%. A back-of-the-envelope calculation suggests that a team may have lost more than a half million dollars in attendance revenue. However, as found in the literature, subsequent increases in terror-alert levels appear to dull the public, since recent alerts no longer affect attendance.