Monday, July 14, 2008

Bummer of a multiplier, Howard 

The Democratic National Convention Committee told the city of Denver that its convention would provide $160-$200 million in economic impact. Ed Morrissey reports that they might be a few bucks short.
According to the Denver Post via Politico, Denver businesses have been disappointed by the amount of money spent locally by the Democratic National Convention Committee. While over 2,000 listings for local companies have made the DNCC�s directory, little actual revenue has been received by locals for the convention itself. The DNCC seems more comfortable working with vendors they already know, from as far away as New York City.
A recent paper by Robert Baade, Robert Baumann and Victor Matheson (BBM) argues that these claims of economic impact are largely bogus. The economic impact of all these conventioneers on Denver or St. Paul will be offset by local persons leaving the city while the conventions -- and all the traffic snarls and crowded bars and restaurants they entail -- go on. What happened to Broadway plays while the GOP met in New York in 2004? Down 20%. BBM cite a study by Craig Depken and Dennis Coates that showed the 1992 GOP convention in Houston "reduced taxable sales by $19 million and reduced sales tax revenues by approximately $1.4 million.� BBM find that there is no discernible effect of conventions on employment or personal income. Perhaps part of the reason is that conventions don't spend all their dollars locally.

The same applies, by the way, for St. Paul, but at least one group is figuring out how to grab a few dollars.

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