The Relocation Effect of a Major League Franchise on Residential Property Values
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We exploit the relocation of the NFL’s Rams franchise as a natural experiment to estimate the effect of residential proximity to sports amenities using difference-in-differences hedonics. For a sample of single-family homes transacted in St. Louis between 2012 and 2019, we reveal that the relocation has provoked a significant relative price depreciation of 7.52% in housing values within a three-mile impact area. Subsequent distance ring analyses show that the effect is dispersed heterogeneously across space and declines in a non-linear distance-decaying pattern from the former host stadium. An approximation of the aggregate relative housing value depreciation suggests that the Rams generated substantial intangible amenity value in St. Louis. However, this magnitude effect may only justify partial subsidies for sports facilities and cannot provide a broader economic rationale for the generous public subsidization seen over the past decades. These results withstand a wide range of robustness checks, although they are somewhat mitigated considering general equilibrium effects
Recommended citation: Froch, Jonas. (2024); "The Relocation Effect of a Major League Franchise on Residential Property Values"; Working Paper; University of Cologne
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