Caitlin Clark Did Not Add Millions to the Iowa City Economy
She's a superstar who has radically changed how Americans watch women's basketball, but the claims of her economic impact are much less believable
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Imagine walking into a packed arena, the crowd buzzing with excitement every time Caitlin Clark touches the ball. Her time at the University of Iowa wasn’t just a showcase of basketball brilliance; it was a headline-grabbing show that filled seats, broke records, and eventually got her on Saturday Night Live. Her college career is now wrapped up, and the talk has shifted her impact on the WNBA, likely as the top pick for the Indiana Fever. Exciting, right?
But here’s where it gets interesting: aside from the sports headlines, there’s a buzz about how much money Clark brought to the local economy in Iowa City. Some people said she might have contributed up to $82.5 million to the local and state economy, and local media outlets ran with it. Even the Indy Star picked up the story to argue that Indianapolis would benefit financially if Clark were selected with the #1 pick in the WNBA draft. After all, $82.5 million sure sounds like a lot of money, doesn’t it?
When these analysts estimate a superstar athlete’s impact on a local economy, they often estimate things like how much fans spend on tickets, food, merch, and maybe even a stay in town if they come from far away. And all that spending? They argue that it doesn’t just sit in the cash registers at local bars and restaurants—it gets re-spent around the area, multiplying the economic effect.
But—and it’s a big "but"—these calculations can get a bit... over-enthusiastic. For starters, there are often a lot of unrealistic assumptions about how much new spending occurs when visitors come to town. For example, many assume that every dollar spent is a new dollar to the local economy instead of considering that some of it might just be local money shuffled around. These studies also frequently ignore what economists call “opportunity costs”—spending your Saturday watching Clark play means you’re not spending money (and time) elsewhere in town.
So, when we hear these big, flashy numbers about the economic impact, it’s worth pausing to ask: What’s really included in these calculations? Are they considering all the angles or just the ones that make the story sound good?
Understanding the real impact of sports stars like Caitlin Clark on local economies isn’t just about adding up dollars and calling it a day. That’s what makes economics both fascinating and a bit tricky—it’s more than just the number. It’s also about the stories they number tell and the pieces those stories might be missing.
The Substitution Effect
Let’s dive into a pretty big concept that often gets left out of those flashy economic impact studies: the substitution effect. Picture this: It’s game night, and there’s a choice on the table—spend $200 to watch Caitlin Clark shine on the basketball court, or drop the same amount on a dinner and movie. Same city, same $200, but spent in completely different ways.
The substitution effect is all about choices and trade-offs. When people choose to spend their money on one thing, they’re often giving up something else. This spending doesn’t create new economic activity; it just shifts it around from one part of town to another. While some businesses may see the immediate benefits, the money stays in the same economy but just changes bank accounts.
Clark’s games have become super popular in Iowa City, pulling in more fans than ever before. Awesome for the women’s team, right? But here's the twist: even though more people are flocking to see the women’s games, the men’s games saw about 2,000 fewer fans than normal last season. No one really knows if those fans are switching from buying men’s tickets to women’s tickets. If that is case, then the women’s team isn’t bringing any new money into the economy but instead redirecting where people spend their existing entertainment budget.
If it isn’t the men’s team that’s affected, it could also be that while the arena selling women’s game tickets is buzzing more than usual, maybe the local movie theater or restaurant across town is quieter on game nights. Just because the women’s basketball games are booming doesn’t mean that everyone is benefiting. Other parts of the local entertainment scene might be taking a hit, and the overall economic impact? It might just balance out to zero.
That’s the substitution effect in a nutshell, explaining how new money in one place isn’t really extra money for an economy—it’s just the same money as before being spent in different locations. So next time we hear about the economic benefits of a sports star, a new stadium, or a big event, it’s worth asking: Are we really seeing new spending, or just spending the same money in new places?
Economic Leakage
Let’s add another layer to our economic exploration with Caitlin Clark’s impact on Iowa City, focusing on a sneaky little thing called "leakage." In economics, leakage is all about where money goes after it’s spent.
Here’s how that might look when enthusiastic fans show up to Iowa City to watch Clark play: They spend money on tickets, food, souvenirs, and maybe even a hotel stay. Sounds great for the local economy, right? Here’s the catch—a lot of that money doesn’t actually stick around in Iowa City. Instead, it leaks out of the local economy, flowing away to other regions and states.

For some context, an estimated 14.8% of fans this past season were from out-of-state compared with 10.3% in previous seasons. This increase in visitor numbers means more spending in Iowa City that wasn’t occurring before. Yet, despite this influx of cash, a significant portion of that spending doesn’t circulate within the local community.
Why does this happen? Well, consider what these fans are buying when they visit. A lot of the merchandise like team jerseys or stadium snacks might not be made locally. So, when you buy that cool basketball jersey or a hot dog at the game, the money you spend goes back to the big companies or suppliers that aren’t based in Iowa City. Similarly, if the hotel where fans sleep or restaurants where they chow down after the game is part of a national chain, a chunk of what’s spent there sails right out of town to some corporate HQ elsewhere.
Crowding Out
Let’s look at one last key economic concept that can play a big role in local economies when star athletes like Caitlin Clark draw huge crowds: the crowding out effect. While often discussed in terms of government spending, it has a pretty interesting role in scenarios like this too.
Imagine a big game day in Iowa City—streets are packed, fans are everywhere, and there’s a buzz in the air. It’s exciting, but it also means the local government and services have their hands full. Police, maintenance crews, and other essential services might be all hands on deck to manage the game crowd, which could mean less attention to other community areas or events that need support too.

Moreover, consider the average tourist or even residents who aren’t there for the basketball game. The influx of fans can lead to busier streets and higher hotel prices, which might discourage them from coming into town or enjoying their usual hangouts. In some cases, locals might even skip town for the weekend to avoid the game day frenzy, spending their money elsewhere.
This crowding out effect means while the basketball games bring excitement and spending to certain parts of the economy, they might be causing less economic activity from other people who want to spend money that weekend. Clark’s presence generates excitement and draws crowds, which is great for some businesses and the local vibe. But it might squeeze out other opportunities for economic activity and make the city less enjoyable for others who aren’t interested in basketball.
Final Thoughts
It’s clear that Clark’s impact goes beyond her big plays on the court—she has a direct impact on many people’s lives and pocketbooks. Despite her draw, it’s important to understand the nuances of economic impact in a community that rallies around its sports heroes.
While Clark’s basketball prowess has shone a spotlight on women’s sports and brought undeniable excitement to Iowa City, the $82 million economic impact figure needs more scrutiny. Economic impact studies are useful, but they have limitations that must be better addressed.
For local policymakers, business owners, and residents, it’s important to peel back the layers of these studies and understand what’s really happening economically. This scrutiny ensures that investments and policies are based not just on the optimism of headline figures but on a more grounded and realistic assessment of economic impacts.
Clark has undoubtedly sparked pride and joy in the community. However, attributing a sweeping economic boom to her presence oversimplifies the complexity of local economies. In the end, Caitlin Clark’s legacy in Iowa City will be remembered for its vibrancy and inspiration on the court. The story of her economic impact should instead serve as a valuable lesson in the economics of sports stardom—full of excitement, yes, but also requires a careful analysis to understand the whole game.
Indiana is the 34th largest metro area in the United States while Iowa City is the 248th largest [U.S. Census Bureau]
Since Clark declared for the WNBA draft in February, the average listed price has risen 91% for tickets to the Fever’s first game against the Connecticut Sun [USA Today]
The Iowa City metro area generated $12.9 billion of economic activity in 2022 alone, more than 1,500 times the estimated impact of Caitlin Clark’s entire career at Iowa [U.S. Bureau of Economic Analysis]
The University of Iowa women’s basketball held an exhibition game in Kinnick Stadium that attracted a record-breaking 55,646 fans, the most to see a single women’s basketball game [University of Iowa]
The University of Iowa’s 2024 fiscal year budget was $5.34 billion [Corridor Business Journal]