Summary of entries in economic impact and regeneration of local communities

Work in this area divides into four broad categories – the economic benefits to be derived from general increases in fitness and health; the overall economic importance of sport to the economy; the economic importance of sports teams to cities (much of this work refers to the USA); the economic impact of sporting events.

Using secondary data Pratt et al, Martin et al and Nicholl et al illustrate the direct and indirect economic benefits to be obtained from increased physical activity and associated health improvements. Using large-scale survey data from the USA, Martin et al illustrate real and substantial medical cost differences between the physically active and inactive, with the largest differences being among women 55 and older  Martin et al  and Nicholl et al illustrate that the cost benefits accrue most for those aged 45 plus, but that in younger age groups the costs of disease prevention are outweighed by sports-related injuries  Both suggest that some health care costs among adolescents could be reduced via the promotion of safe  sports.

The work of Taks and Kesenne, the Leisure Industries Research Uni  and Cambridge Econometrics all outline the macro-economic importance of sport and sports-related expenditure (although many of the data sources have acknowledged limitations and the precise nature of ‘sports-related  expenditure is not always clear).  

The work of Austrian and Rosentraub, on sports-related developments in four cities in the USA, concludes that a focus on sports and the hospitality sector can contribute to downtown development, coupled with commitments from other businesses to expand or stay downtown (althoug  they express some concerns about opportnity costs and equity). Coates and Humphreys examine the impact of sports teams in 37 cities in the USA and conclude that the positive impact is concentrated in particular employment sectors and, because some expenditure is substitution, has a negative effect on some others.

Although  the most systematically researched area is the economic impact of sports events, Crompton suggests tha  many economic impact analyses report inaccurate results and illustrates 11 common sources of error  The work of Madden and Crowe provides a detailed illustration of the complexities involved in the estimation  of the projected economic impact of a mega event (the Sydney Olympics). It deals with the pre-Game  preparation and construction phase; the Games year; the post-Games phase (20001/02 to 2005/06). It consider  a wide range of factors, details the assumptions that need to be considered in such calculations and outlines a series of measures required to maximise economic returns.

Mondello  and Rishe seek to take account of some of Crompton’s concerns in a survey-based analysis of the economic impact of a variety of amateur sporting events in several cities in the USA  Although the data were collected during the events, the authors conclude that the impacts of such events depend on a number of factors: the number and origin of non-local teams, the proximity of the team  involved; length of visitor stay; operational and organisational expenditures by non-local organisations

Baad  et al explore the accuracy of forecasting in relation to the 1994 World Cup in the USA. Using a balance of payment model and data on metropolitan growth they conclude that, although impacts were uneven, overal  the predictions substantially over-estimated the real economic impacts. They explain this because of a ‘crowding out’ effect on non-match days over a three-week period, lost convention business and televised matches keeping locals at home.

In order to provide a more systematic  basis for the economic evaluation of sports events, UK Sport has produced a guide to relevant research methodology and multiplier analysis. Measuring Success 1 provides a guide, based on the work of the Leisure Industries Research Unit, to the definition and measurement of the economic impacts of a range of sports events (reported in a number of articles in this section). Based on a typology of the varying  balance between spectators and competitors, this work illustrates the different economic potential of different types of events. Measuring Success 2 extends this work and provides detailed analysis of 1  major sporting events including the spending levels and patterns of key groups, a balance of payment  analysis for certain international events, the impact of Lottery funding and an evaluation of the accuracy of the forecasting model.