3/24/2007

Kobe Bryant Is Good For The Economy

In the article "Kobe Bryant Is Good For The Economy" it talks of how because of Kobe's recent success the economy is going to do better. I hate to say this, but I think it is right. Kobe has 4 nights where he has scored over 50 points in a basketball game. This is making history and because of that people are going to want to spend more. Nothing stimulates the economy better than a little consumer spending. Businesses are starting to ask more money for Kobe products. From jerseys to pictures it is getting pricey. People who want to be a part of the excitement and a part of the action are dishing out the money. Will this trend continue or is it a short term expansion in the economy? I believe that it will be a short term expansion and will shortly return to normal. Although the NBA records will always remember it, the effect on the overall economy will only be short lived.

10 comments:

Keysportsfan said...

I would have never imagined that a basketball player making history would actually influence the economy. The article has some valid points. I work in the grocery industry and I would attribute day light savings to the increase in consumer spending. People are gearing up for the warm weather and purchasing more. I am impressed by Bryant’s ability to increase jersey sales. Bryant now has the world’s best selling jersey. China likes Kobe more than Yao Ming.

Patrick said...

I agree with Bend on the fact that this will be a short run boost in spending and economic expansion. People will continue to spend money on Kobe apparel and Laker's tickets for a while. However, it is another 'fad' so to speak that will soon pass. I believe there is more to the story; however, than Kobe's record scoring streak. A major part of this splurge is in how Kobe overcame his past. Not too long ago, when you heard the name Kobe Bryant, it was a negative comment or story. He took care of his mistakes, reconciled his past and kind of grew up. Yea, he is still a showboat and will probably always be. From the NBA all-star MVP to scoring over 50 points in four consecutive games, Kobe is playing good basketball. No one can argue that.

joseph said...

I wonder if this positive influence will only stimulate the economy in the short-term. Kobe’s success has put basketball in the spotlight in China. This success can have long run consequences for the attractiveness of basketball and international sports in general.

Aaliyah said...

Kobe Bryant may be considered flashy and cocky, but is there any question of whether or not he is a star? Michael Jordan was most likely seen as somewhat flashy by "non-fans" in his time as well, but now he has a very successful line of Jordan Clothing and Nike still sells his vintage shoes for a small fortune. If Bryant continues to put up numbers like this and becomes a favorite of the people, then the effects on consumer spending in the economy could indeed be long-term.

Dr. Tufte said...

The effects will be short-lived and also small, Bend.

For Aaliyah, it is true that Kobe may turn out like Michael, but that doesn't mean that the overall pie is larger, just that he will get a bigger piece of it.

Jordan said...

Dr. Tufte said:

"The effects will be short-lived and also small... it is true that Kobe may turn out like Michael, but that doesn't mean that the overall pie is larger, just that he will get a bigger piece of it."

I agree completely. Whatever effects Kobe may have had on the economy were probably too insignificant to really make a difference. Personally, I think that if people weren't turning to be "Kobe" fans, then they would probably end up being "Somebody Else" fans, spending money on memorabilia of that athlete instead.

William said...

Dr. Tufte,
I agree with you and Bend and think that the effect will definitely be short term. It seemed that this was a similar effect when McGuire played baseball and made all those homeruns.

And to the second comment made, I don't believe Kobe will ever be anything like Michael Jordan. Michael Jordan was loved by everyone because of his skills, hard work, team work, and love for the game. In my opinion Kobe has none of these attributes and is very focused on himself.

Dr. Tufte said...

Michael Jordan was also regarded as a loser until he'd played for a while - because he didn't instantly win championships.

Eddie said...

I will preface my comment by pointing out the fact that the original post was in March 2007. Much has happened within the overall economics of Kobe’s career, the LA Lakers and the NBA since that time. I wanted to make a point about the comment by Dr. Tufte:
“I agree completely. Whatever effects Kobe may have had on the economy were probably too insignificant to really make a difference. Personally, I think that if people weren't turning to be "Kobe" fans, then they would probably end up being "Somebody Else" fans, spending money on memorabilia of that athlete instead.”
I agree that Kobe’s “50-points in four consecutive games” streak was probably too insignificant to really make a difference in the economy. I also agree that if people weren’t turning into “Kobe” fans, they would probably end up being “somebody else” fans. I would add that had any other player in the NBA accomplished a “50-points in four consecutive games” streak (or feat of similar impact) there would exist an impact at least as palpable. I would argue, that whatever impact this had on the economy was a function of the feat itself, and not that it was Kobe Bryant accomplishing it. In 2012, the New York Knicks featured a young point guard named Jeremy Lin whose few weeks of “Linsanity” was every bit as impressive as Kobe’s 50-point game streak, yet Lin wasn’t good enough of an NBA player to warrant playing time on a terrible team like the Knicks (Lin spent much of his pre-Linsanity season on the bench or in the D-League).
The NBA is a superstar’s league. The collective efforts of current superstars like Kobe, and budding superstars like Lin, have a tremendous effect on the value of any NBA market. Franchise values have massively grown since 2007, in very large part due to the success of many current and budding superstars. The NBA and the economy are better off for it.

Dave Tufte said...

Eddie: 50/50

I am I being an a** if I say I agree with you agreeing with me ;)

Anyway, it's interesting to go back and look at these things from a future perspective. Now, we could just as reasonably say that Kobe's big month caused the Great Recession. But that's silly too ... the whole discussion is a bit overwrought, eh?

It's beyond the scope of an MBA level class, but what's going on here is related to an idea in microeconomics called "gross substitutability". Basically, people break down their purchases into classes, and then into sub-classes. Kobe is a sub-class of NBA-related purchases, which are a sub-class of sports-related purchases, and so on. It's not reasonable to think that Kobe's performances will specifically help the economy because, while they may increase purchases of Kobe related stuff, they may not increase purchases of NBA-related stuff, and are even less likely to increase purchases of sports-related stuff, and so on.

If we were really interested in looking for such an effect, we'd need to look at not just new stars, but new sports. So Tony Hawk might be a better possibility.