It's that time again. Another big event at Jerryworld is approaching, and the Morning News is credulously reporting an outrageous number for the event's estimated economic impact. This time, it's the Academy of Country Music Awards that's supposed to hand the North Texas economy its latest event-related windfall, to the tune (rimshot) of $123 million.
Here's a link to people dancing the "Cotton Eyed Joe," a country ditty whose traditional Texas-style refrain perfectly sums up what that number means.
As we reported in January in response to an extremely similar DMN piece about the potential $300 million impact of the College Football Playoff championship game, sports economists generally agree that big events are not an economic boon to the cities that host them.
Nevertheless, not many people outside of economists have a firm grasp on ideas like the substitution effect and context, and such claims are usually not verified, so companies like BDO USA, which created both the CFP and ACM Awards estimates can get way with making inaccurate projections, Dave Berri, the former president of the North American Association of Sports Economists said in January.
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"There's a reason why an event doesn't [generate much excess revenue]. If you think about hosting a major event in a town, you bring in these tourists who come in. The problem is, when they show up, a whole bunch of other people who were probably going to be spending money that weekend or that day, they're not going to come that day. There's going to be a ton of traffic and they're all going to stay home."
BDO doesn't have to come back after the event to measure anything, so we guess they should be congratulated on showing restraint.
"Nobody's going to check on this, so make up any number you'd like, I guess," Berri said. "No one is going to check on whether it's true or not, so what difference does it make? As long as you're making up stuff, why don't you go for the whole gusto, say it's $800 billion?"
That much? Oh, come on, man. No one is going to swallow that, are they, Morning News?