The Study

The Financial Follies of the NCAA Final Four

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With April approaching, March Madness is quickly coming to an end. This weekend, the Final Four games will take place in Houston, Texas. It’s a given that two high-quality basketball games will be fun to watch, but does it logically follow that hosting the Final Four will make a ton of money for Houston?

According to research by Holy Cross’s Victor Matheson and Robert Baade, it doesn’t. Studying cities that hosted Final Fours from 1970 through 1999, the two found no statistically significant impact. In fact, while all the results for each year were almost all statistically insignificant, they were, on average, negative. And even in the years where the impact was positive, it was generally very small. So while some in Houston are predicting a $100 million boost for the city’s economy, it may never materialize. As the authors argue, “the evidence indicates that the economic impact of the Final Four will more likely be the equivalent of a financial ‘airball’ than an economic ‘slam dunk.’”

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