Is There a Consensus? An Experimental Trial to Test the Sufficiency of Methodologies Used to Measure Economic Impact

Abstract

This research utilizes local GDP of 383 MSAs in the U.S. to determine whether historical methods in the academic literature to measure the economic impact of sports are sensitive enough to generate conclusive results. An experiment is created and shows that commonly used methods fail to be able to detect the built-in-by-design injections of economic activity for the experimental group until very high levels of treatment of at least $300 million to $1 billion annually are present, thus providing evidence that Type I errors (rejecting a true null hypothesis) are likely to have occurred in some of the literature.