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Likely Economic Impact of Super Bowl XL, AEG Working Paper 2006-10

On Sunday, February 5, 2006, Ford Field in Detroit, Michigan will fill with 70,000 fans, and television sets across the country will tune in to watch Super Bowl XL between the Pittsburgh Steelers and the Seattle Seahawks. In the days leading up to the event thousands more will converge on Metro Detroit, generating an economic impact for the area that will likely exceed that of any other one day event held in the area.

Regardless of how much these visitors spend, or how long they stay, it’s a safe bet to assume that Detroit will benefit from hosting the event. The degree to which the economy will benefit, however, is debatable.

Unfortunately, many “economic impact” reports follow neither a consistent methodology nor a conservative approach, and are done largely for public relations purposes. As a result, many such reports mislead the public as to the true economic impact of an event. Our analysis, on the other hand, provides a much more conservative and realistic assessment of the likely economic impact that Super Bowl XL will have on the Detroit area.

Our conservative measure of economic impacts, which we further discuss on page 4, accounts only for net new economic activity that would not have otherwise occurred in the area. Other analyses often double count economic activity that would have occurred in the area regardless of the event. A similar error is to ignore the costs of the event. As a result, many of the “economic impact” figures put forth are of great magnitudes, and useful only for public relations.

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