Big Flashing Red Bullsh*t Alarm Going Off

Huge alarm bells are going off as I read this headline in the Arizona Republic, whose motto should be "Happy to credulously print any crazy number your lobbying group puts in a press release."  In this case, the headline reads:

Ariz. economy reaped $500M from Super Bowl

Uh, sure.  Right.  Bet that is a quality number.  Lets first vet the source.  Who provided the paper with this number?

A study released today by the Arizona Super Bowl Host Committee
estimates professional football's championship game at University of
Phoenix Stadium in Glendale generated an economic impact of $500.6
million for the state.

Oh, I see.  Certainly a disinterested party.  And how was this number arrived at?

Arizona State University's W.P. Carey School of Business
completed the economic-impact report based on surveys of more than
1,500 visitors who came to the Valley to attend the game or take part
in festivities.

The survey revealed that visitors stayed in Arizona for an average of
3.9 nights and spent an average of $617 each day on hotels, food,
alcohol, transportation, recreation, shopping and other categories. The
report also calculated the amount that organizations dropped during
Super Bowl week.

Well, its good to see the business school at America's #1 party college on the case.  I would have thought this would be a very challenging study to conduct.  In my naiveté, I might have assumed that these Superbowl visitors might have displaced other potential visitors who would have been there anyway.  I would have fixated on the fact that Superbowl week is also Phoenix Open week and, given the beautiful winter weather here, one of the prime tourist weeks of the year even without the Superbowl.  I might have wondered how hotel stays during a week when most local resort hotels are full anyway could have been credited to the Superbowl, particularly when many locals left town to avoid the scene.   I might have been worried that I was not counting truly incremental revenues, but the folks in the business school at the university with Americas hottest coeds must be smarter than I am.

So apparently, these geniuses have found a way to assume that 100% of this $617 per day times 3.9 days is incremental and that there is no substitution effect.  However, they have also managed to somehow assume that University of Phoenix Stadium is even larger than I thought.  Because using these numbers, the only way to get to $500 million is if there were nearly 210,000 visitors.  Wow.  This does not even include the thousands of us from Phoenix who were also in the stadium. 

Look, the way to do this study is simple.  You look at sales tax receipts in Maricopa county over the period of January 2007-February 2008.  You calculate an underlying growth rate.  Then you compare the sales tax receipts for the Superbowl months (Jan-Feb 2008) with the same months a year previously, and see how much growth there is, if any, above the underlying growth rate.  I will tell you the answer right now:  It ain't anywhere close to $500 million.  I will eat my hat if its over $50 million.

Here is a reality check:  In 2004 the entire retail trade, from restaurants to stores to hotels, was $16.4 billion for all of Arizona.  This is $315 million per week.  Basically the study is saying that the entire retail trade for the whole state of Arizona was more than doubled in Superbowl week. 



  1. Brian:

    "Basically the study is saying that the entire retail trade for the whole state of Arizona was more than doubled in Superbowl week."

    Which of course could never be accomplished by the addition of the stadium's maximum 73,000 capacity to the Phoenix metro area.

    Unless they all drank Cristal at a rate greater than even Snoop Dogg himself.

  2. la petite chou chou:

    Bha-hahahaha. Those kinds of obvious math errors crack me up. And I'm not even good at math.

  3. Steve:

    This is the same BS analysis that every city wishing to host an Olympics does....they conveniently "forget" the baseline and assume the hotel and restaurants would be absolutely empty. Sure, 80,000 or whatever number of people came to the game, but they probably displaced the normal 60,000 or whatever that would have been here anyway. Hotel occupancy goes from 80% to 98% not 0% to 98%.

  4. DesertJeff:

    Are you robador, or is someone plagiarizing you? (Just checking) ;-)

  5. Craig:

    You're forgetting the magical "multiplier effect" whereby the money spent by game-goers changes hands so often that even fishermen in Alaska are eventually lifted out of poverty (much as butterfly wings beating in Nebraska cause typhoons in poor parts of Asia.) It's often referred to as the six degrees of Bill Belichick.

  6. Mesa Econoguy:


    Everything printed in the AZ Repugnant should cause the giant red flashing bull/horsecrap alarms to go off.

    ASU has a Skool o Bidness? Who knew…..?

  7. Doc:

    I'm a little late to this, but the Arizona Daily Star had an interesting article the other day:

    Country Thunder USA will rumble into Canyon Moon Ranch near Florence today with a highly advertised four-day lineup that includes such country stars as Phil Vassar and rock veteran John Fogerty.
    But does the event — with the tens of thousands of people it draws each day — inject significant amounts of money into the local economy?
    Regional economic experts say no. Although the numbers for Country Thunder don't add up to much, it does gives the area valuable exposure, said Rayna Palmer, with the Northeastern Pinal Economic Partnership.
    [ . . . ]
    Florence officials, who did not produce the town's sales tax figures, said the town does not experience any significant spike in business either, but appreciates the exposure Country Thunder brings.

    A rare admission from government "officials" . . . .