Suppose your community is considering using public money to build a new sports stadium for the team that is already in the community but is likely to leave without a new stadium. Suppose you are watching a news broadcast in which the supporters are saying that it will enhance economic activity because of the increase in restaurant activity that will occur around the new stadium. Now suppose you hear that an independent economist is going to appear during the next segment. It is likely she will say

Question

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The independent economist is likely to point out that the stadium may not create any new economic activity in net because people will simply shift their spending from other areas to attend the games. This means that there will be winners (e.g., restaurant owners near the stadium) and losers (e.g., restaurants further away from the stadium who will lose customers). Therefore, the investment may not be worth it from an economic perspective.

Suppose Your Community Is Considering Using Public Money to Build