Economic Impact Analysis of Sports Facilities and Events: Eleven Sources of Misapplication

Abstract

Many sports events, facilities, and franchises are subsidized either directly or indirectly by investments from public sector funds. The scarcity of tax dollars has led to growing public scrutiny of their allocation; in this environment there is likely to be an increased use of economic impact analysis to support public subsidy of these events. Many of these analyses report inaccurate results. In this paper, 11 major contributors to the inaccuracy are presented and discussed. They include the following: using sales instead of household income multipliers; misrepresenting employment multipliers; using incremental instead of normal multiplier coefficients; failing to accurately define the impacted-area; including local spectators; failing to exclude “time-switchers” and “casuals;” using “fudged” multiplier coefficients; claiming total instead of marginal economic benefits; confusing turnover and multiplier; omitting opportunity costs; and measuring only benefits while omitting costs.

Estimating the Benefits of Sub-Saharan Africa Urban Land Use Planning System: A Methodological Discussion

“…The incomes, employment, sales etc. generated from these rounds of expenditure classified as direct, indirect and induced effects (Armstrong and Taylor, 1985;Crompton, 1995) In Figure 1.2, planning policies promotion of an initial expenditure in an urban economy in the form of real estate investment is spent on four major activities. These are land acquisition, construction of building units, infrastructure and marketing of the building units, and services related thereto.…”

“…This exercise superficially may seem simple, but in actual sense it is very complex (Crompton, 1995;Hughes, 2003;Hammond and Antwi, 2010).…”

“…First of all, several multipliers such as income, employment and housing can be assessed following an initial spending in an economic system. Conceptually, it remains unclear which of these multipliers is suitable for economic impact analysis (Crompton, 1995).…”

“…These effects amount to the economic impact of the real estate investment and ultimately planning policies in the urban economy. The multiplier, thus, recognises and predicts the subsequent changes in the level of these economic activities in the urban economy (Crompton, 1995;Hughes, 2003). It is therefore, the coefficient of the initial expenditure made in an economy; the real estate investment as in the above example.…”

Measuring attendance: issues and implications for estimating the impact of free-to-view sports events

“…town centre) are included in the attendance estimate. Discounting 'casual' attendance is also commonly recommended for the purpose of event economic impact evaluation to avoid double counting (see for example, Crompton 2001Crompton , 1995 and was considered a relevant issue for estimating spectator attendance.…”