Convention(al) myths & truths

Convention(al) myths & truths

Let’s cut to the chase:

Any elected political leader and/or appointed public servant is doing the public – and public policy – a disservice by constantly claiming that hosting a political nominating convention in Pittsburgh is some kind of massive economic generator.

Simply put, it repeatedly has been proven not to be in numerous scholarly studies.

VisitPittsburgh, the tourist-attracting arm of the City of Pittsburgh and Allegheny County, has claimed that the city/region would reap an estimated $200 million in economic benefits by hosting such a confab.

That number has been repeated ad nauseam in the weeks since it was revealed that VisitPittsburgh is bidding for both the Republican and Democrat national conventions in 2024.

And if that’s not enough to convince the public that it’s a good idea, well, betcha-by-golly-wow, you can’t dismiss all the free advertising that Pittsburgh will receive, proponents argue.

“You just can’t put a dollar value on that kind of thing,” convention backers are wont to say. It’s such an “intangible” benefit, they’re likely to add.

But it’s pure fiction. It’s undiluted balderdash. As a study by three scholars at the College of the Holy Cross Department of Economics concluded in 2017:

While “simple observations” suggest “that hosting national political conventions generates a large inflow of overnight visitors and increases hotel revenues, the cumulative effect of approximately 29,000 additional room nights of lodging services and $20 million of hotel
revenue imply that traditional economic impact estimates may be unrealistically large,” researchers Lauren R. Heller, Victor Matheson and E. Frank Stephenson also found:

“Economic impacts exceeding $150 million, as are often claimed, require large assumptions about the amount of convention-goers’ spending on food, beverages or other goods and services or big
multiplier effects,” they said.

“Without a substantial multiplier effect, average convention-goers would need to spend at least seven times the amount that they spend on hotel rooms in the destination city (not including airfare), in order for even the smallest estimates of traditional economic impact to
be accurate, or massive sums would need to be spent at local business or on local labor by convention organizers in staging the event.”

But, “Even if multipliers were as large as 1.5, average convention-goers would need to spend at least four times the amount of hotel spending on other expenses (food, local transportation, etc.) in the destination city,” the trio calculated. “Given that lodging expenses tend to constitute the largest share of a convention-goer’s spending, this assumption seems unrealistic.”

And here’s the kicker hiding behind the curtain that cheerleaders for hosting conventions would rather a snookered public ignore:

“Moreover, it is also important to note that even the modest benefits found in our results could easily be swamped by the additional costs associated with hosting major political conventions,” concluded Heller, Matheson and Stephenson.

“For all of these reasons, after carefully assessing one of the most crucial components of convention spending at a daily level, political conventions do not seem to have the large economic impact that is usually suggested by traditional economic impact studies.”

As per a Philadelphia Inquirer story in 2015, and citing a University of Holy Cross scholar:

“Economists often say that host committees largely inflate projections of economic impact when it comes to major events. Robert Baumann, an economist and professor at Holy Cross … studied more than 30 years … of data from Democratic and Republican national conventions. 

“According to an abstract of his findings, ‘the presence of [either convention] has no discernible impact on employment, personal income or personal income per capita in the cities where the events were held.’”

And while convention proponents tout such “benefits,” they seldom talk about the cost of lost income to many businesses – especially restaurants — because of, in part, convention-related security restrictions, researchers remind.

All this said, and as we asked last week, how much public money is being pledged to convention organizers by Pittsburgh and Allegheny County officials blindly repeating the myth of grand economic benefits?

Well?

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).