Lakers and the cost of victory

Attention L.A. business owners: Don't expect to get much done on Monday. The Lakers victory parade should draw hundreds of thousands of people and lock up downtown for much of the day. Streets will be closed beginning Sunday night, and the Monday morning commute downtown is sure to be a nightmare - so much so that a few of your employees might just decide to come down with Laker flu. And it'll spread. Multiply all that by the 426,000 business establishments in L.A. County, and you're looking at a slow day, productivity wise.

But does it mean anything beyond a lost day? Economists are always asked about this when snowstorms shut down a city for a day or two, and their usual answer is that the work eventually will be made up (folks stay late the next few days or whatever). Of course, there are some industry- and location-specific gains and losses. If you happen to operate a Starbucks along the parade route, Monday should be very nice. If you happen to run a car dealership, it won't be so nice. Since L.A. is such a large economy, the pluses and minuses are likely to even out.

For what it's worth, an academic paper some years back suggested that economic activity during the Lakers championship runs in 2000 and 2001 might have caused a drop in taxable sales.

For the second quarter, the operation of Staples Center correlated negatively with economic activity in the City of Los Angeles. It is possible that during the Lakers championship runs, people in sufficient numbers preferred to watch the games at home and spent less money as a consequence.

The evidence seems a bit flimsy - 2000 and 2001 happened to be recession years, and it's possible that the drop in taxable sales had more to do with a down economy than whether you were watching the Lakers and not going to the movies. Good luck figuring it out.