Anticipating the honeymoon: Event study estimation of new stadium effects in Major League Baseball using the imputation method

Abstract

This paper estimates the impact of new stadiums on attendance and revenues of Major League Baseball teams between 1970 and 2019. Recent studies reveal that two-way fixed effects (TWFE) models may produce biased estimates, proposing an “imputation” method instead. This paper uses the imputation method to generate a counterfactual estimate, based on untreated observations: the average treatment effect on the treated (ATT) equals the difference between actual and counterfactual estimates. The analysis shows that there were significant anticipation effects associated with new stadiums, up to three seasons before opening. It suggests previous estimates may significantly understate new stadium revenue gains.