What: Estimated economic impact on the New York area
This year’s big game will be played in the largest metropolitan area in the country. All sorts of numbers have been thrown out regarding the economic impact of Super Bowl XLVIII on the Greater New York City area—the NFL and politicians in New Jersey and New York have claimed the event will generate between $500 million and $600 million for the local economy. But many economists have disputed this largely unscientific figure. And studies have revealed that in the past, the NFL’s estimates have been inflated by as much as four times the actual level of financial impact on host cities.
The problem with the figures reported by the NFL and the New York/New Jersey Super Bowl Host Committee is that they consider all spending associated with the Super Bowl as part of the overall economic impact. However, much of the spending that occurs does not directly improve the local economy, as visitors aren’t necessarily buying what the local economy is selling—for example, most visitors stay at major national hotel chains in the area and don’t necessarily consume much from local businesses.
A better estimate of economic impact is the direct spending in a local economy. This graph shows the amount of money spent in the host metropolitan areas of the last twelve Super Bowls, along with a projected total for this year’s game calculated using NerdWallet’s regression model that takes into account past years’ spending data, populations and relative costs of living in each city and the seating capacity in each of the host stadiums:
Using past data, we project that Super Bowl XLVIII’s financial impact on the New Jersey and New York area resulting from direct spending will be about $194 million, which is about 60-70 percent less than the estimates claimed by the NFL and the host committee.