NBA sweet spots: Distance-based impacts on establishment-level sales

Abstract

This paper examines distance-based effects of the introduction of a National Basketball Association (NBA) team on establishment-level sales. Using a unique micro dataset with precise geographic location information and industry detail, we apply spatio-temporal estimation strategies following Harger et al. and Ahlfeldt and Kavetsos. We build on the literature by focusing on sales activity, a broad measure of economic activity, for industries related to the NBA-product. Our application considers the relocation of the NBA’s Seattle franchise (Supersonics) to Oklahoma City (Thunder). The results reveal spatially differentiated impacts that would be obscured using data aggregated over space or industry. Specifically, food establishments exhibit increased sales and entertainment establishments exhibit decreased sales relative to establishments in the outer most ring of the study area.