Deadspin ran a really cool graphic the other day claiming to show how spending in Atlanta was up during the Final Four relative to the previous week. (They later posted an even better-presented comparison, with one of those slidey things.) Sales tax data isn’t available nearly that fast, so instead Deadspin used data from Square, a company that makes credit card readers for cellphones, and which apparently knows how to make cool graphics to get some free publicity.
Deadspin’s conclusion:
Square reports that this is a week-to-week 11 percent increase in total sales, from $1.6 million to $1.8 million. This is more than double the $800,000 in sales that Square reported for their similar Super Bowl map, which makes sense given that that bigger event took place in a much smaller metropolitan area.
An 11% increase in sales sounds at least moderately impressive, and would counter previous reports that cities don’t see any jump in spending from hosting events like the Final Four. There are two problems with the Square numbers, though:
- Just because people spent more money using Square devices doesn’t necessarily mean people spent more money overall. Square provides readers to vendors, remember, not consumers, so if they handed out lots of card readers to people operating during Final Four weekend (which you’d think they would, if they’re going to go through the trouble of touting their product based on the resulting numbers), then this just might mean there were a lot of extra Square-enabled folks running around Atlanta last weekend. If people were spending less money at, say, restaurants across town that don’t use Square devices, then that wouldn’t register on the Deadspin maps.
- Even if people in Atlanta spent more money during the Final Four, they could have spend less money at other times as a result. Call it the “temporal substitution effect”: If I go splurge on, say, tickets to the All-Star Weekend Futures Game (as I, in fact, have done), that means I spend more money in Queens on a certain weekend in July; but it also means I have less money left in my back account, so I’m less likely to, for example, splurge on those crazily overpriced tickets to see Tom Petty play at the Beacon Theater in May. To see that, we’d need to examine spending over several weeks and months, not just a weekend, and compare to a similar time period in the previous year — which is what the economic studies that found no positive impact from the Final Four have done.
So: Nice maps, but they should be used for amusement purposes only. It’s possible that there is some increase in spending in Final Four cities — people do come from out of town, after all, and don’t drive absolutely everyone else away during that time — but these numbers don’t tell us much about what that might be.
I’m as anti-publicly-funded stadia as the next guy, and using maps from a company that probably has a tiny percentage of the overall market (not to mention skewed toward certain types of businesses that don’t map well for this purpose—e.g hotels probably don’t run Square to charge customers) mightn’t extrapolate well to telling a larger economic story… but if you’re building massive arenas and hosting these events, then the ‘temporal substitution effect’ is kinda what you want. You’re hoping to get people to come down from NYC or Louisville or Detroit to come to your city and spend their money in your hotels and restaurants. Atlanta doesn’t give a shit who has enough disposable income left to go see Tom Petty at the Beacon Theater.
Hell, Tom Petty probably doesn’t care who comes to see him at the Beacon because he’s getting a guarantee.
No, that’s the geographic substitution effect, which I agree is exactly what Atlanta wants. The temporal substitution effect is where somebody in or around Atlanta blows their all their pocket money on a ticket and a Louisville jersey, then stays at home eating mac and cheese the rest of the month.
I must have confounded your talking about spending money in Queens with spending money in Atlanta (you were spending money in Queens instead of Atlanta).
And isn’t substitution somewhat temporal anyway? It’s not like the entertainment share of my income I spent going to see a band last night was only going to be spent on Thursday, April 11. It might only span the next paycheck for nominal entertainment expenses, but for things that are a couple of standard deviations out, I’m only making a couplathree of those a year, and they aren’t going to schedule themselves so that it’s an either/or on a certain day.
No, the Beacon is in Manhattan. So I’m spending money in NYC in July rather than NYC in May, is my point.
And yes, all substitution is temporal, unless you’re trying to pick only one thing to do on a Saturday night. But my larger point is that it’s possible for an event to boost spending on a particular weekend, without boosting spending (as much, anyway) over an entire month or year. It’s shuffling spending around by date as well as by location.
I understand the point. I’m saying I misread your original intent vis a vis where you were specifically (NYC v Atlanta – or place v time).