Economic impact and regeneration of local communities

This page contains research in the following areas:

  • The direct and indirect 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.
  • The economic impact of sporting events.

Measuring the environmental impact of major sport events (Wales, 2008)

Authors

Jones, C

Date

2008

Keywords

Economic impact, sports events, environment

Country of research

Wales

Summary of findings

This article addresses an issue of increasing importance in assessing the overall impact of large scale sports events – their potential environmental costs. The author illustrates environmental accounting techniques via a case study of the UK round of the 2004 World Rally Championships.

The author illustrates the increasing concern with broad sustainability issues relating to the infrastructural development for, and management of, sports events. It is argued that evaluation tends to concentrate on changes in internal processes and activities rather than outcomes; that there are multiple standards for assessing environmental impacts which makes it difficult to judge trends or compare events or make judgements about public investment; that little attention is given to indirect environmental externalities (e.g. travel to events).

The article provides a brief review of the potentially negative externalities associated with a range of sports events - construction, congestion, transport, travel. The authors briefly examine some approaches to assessing environmental impact - ecological footprint and measuring incremental changes in environmental variables/output - but finds them wanting in terms of providing policy advice (especially when supposedly positive economic considerations dominate).

The author suggests that quantitative accounting can provide an estimate of an event's impact on well-established environmental variables (e.g. carbon emissions, waste) and illustrate which aspects of an event have the greatest impact. The approach is illustrated via a case study of the 2004 World Rally Championships in Wales.

The approach is based on the use of both national input-output accounts and newly developed tourism and environmental satellite accounts. Data were gathered via face-to-face interviews with sample of 590 spectators, half the rally teams and VIP/business attendees and organisers. Direct spectator mileage and associated carbon impact were calculated for a variety of visitor types/modes of travel and competitors and curse officials.

The methodology posits that the 2004 rally resulted in a shock to economic demand as spectators, teams and organisers demanded more Welsh good and services. This initial demand shock is estimated for each industry and has indirect consequences as these industries demand goods and services for other Welsh firms and as wage payments increase and these wages partly result in increased household expenditure. The new production levels for each industry are calculated along with the increased levels of carbon emission and waste.

The author outlines a number of technical, conceptual and methodological constraints on the analysis plus a series of necessary assumptions about spectator behaviour, which lead to conservative estimates. The results indicated that the total CO2 equivalent impact was about 3,500t; the supply-side effects together total 65 per cent of all carbon emissions; about 40 per cent of carbon emissions are associated with remedial forestry work on forest roads; other sectors which emit high levels of carbon include oil processing and electricity generation, other land transport and hotels and restaurants. Supply side waste impacts of 2.65kt are concentrated in forestry operations, hotels and restaurants and coal extraction.

Travel during the rally had more consequences in terms of carbon emissions than travel to and from the event. In economic terms for every £1 million of additional value added in Wales, 930t of carbon were produced. Overall the rally does not perform particularly well compared to established sectors on carbon emission and waste produced per pound of value added.

The author concludes that obtainable data on spectator and organiser activity related to an event can be coupled with established environmental accounts to provide both an estimate of the overall environmental impact of an event and also an indication of which are the 'big hitters' in terms of particular behaviour behaviours or sectors. This method can also give an indication of the 'enviro-economic efficiency' of hosting major events by comparing C02 or other environmental indicators to regional economic value added.

Methodology

Visitor survey, interviews, input-output analysis

Source of reference

Tourism Economics, 14(2), 343-360

Web reference

http://www.ippublishing.com/te.htm

Sport development and economic change in three cities (US, 2002)

Authors

Austrian, Z and Rosentraub, MS

Date

2002

Keywords

Sports provision; cities; urban; facilities; regeneration.

Country of research

USA

Summary of findings

This article outlines the sports-related development patterns of Cincinnati, Cleveland, Columbus (Ohio) and Indianapolis. It explores the hypothesis of economic stabilisation, arguing that the issue is not whether economic activity increased or decreased, but whether the vitality or centrality of the downtown areas was sustained or enhanced. It provides assessment on the impact of sports facilities on the location of people and jobs and longer term economic activity and tourism activity.

It concludes that a focus on sports and the hospitality sector, coupled with commitments from other business to expand or stay downtown, did refocus some level of development activity into the downtown areas of two cities. However, three critical issues remain: the overall cost of the policy, the opportunity costs and inequitable distribution of economic benefits.

Methodology

Secondary analysis of employment data

Source of reference

Journal of Urban Affairs, 2002, 24(5), 549-563

Web reference

http://www.blackwellpublishing.com/journal.asp?ref=0735-2166&site=1

A review of economic impact studies of large sports events (US, 2004)

Authors

Mondello, MJ and Rishe, P

Date

2004

Keywords

Sports events; cities; urban impact.

Country of research

USA

Summary of findings

This article provides a brief review of  a number of economic impact studies of  large scale sports events.  Although the authors outline certain methodological limitations of such studies, the broad conclusion is that there are substantial economic and non-economic benefits associated with such events.  The authors' interest relates to the economic impact of much smaller amateur sporting events and to explore the factors that determine the size of such impacts.  Survey data were collected from between 400 and 600 attendees at a series of events and the following analyses are reported:

The same event held in different cities: Amateur Athletic Association Junior Olympics  and National Collegiate Athletic Association Championships Women's Big Four;
Different events held in the same city: San Antonio, St. Louis, Norfolk;
(Men's versus women's events: Women's Final Four versus a men's regional finals;
Events involving young athletes versus events involving senior athletes: Junior Olympics versus Senior Olympics.

The general conclusions are that the impacts depend on a range of factors: the number and origin of non-local visitors; the proximity of the teams involved; visitor spending patterns; length of stay; operational and organisational expenditures by non-local entities affiliated with the events.  The main factors are average visitor  length of stay and the percentage of non-local attendees. 

Also, they tentatively conclude that women's amateur events have the potential to have a greater economic impact than the more visible men's events.

 Further, amateur events involving  teenage competitors are likely to draw greater spending crowds than seniors events.  The authors acknowledge that their analyses are ex ante (ie collected from spectators during events) and that ex post studies provide a more accurate measure of net economic impact, rather than the gross economic impact which they report.

Methodology

Survey analysis

Source of reference

Economic Development Quarterly, 2004, 18(4), 331-342

Web reference

http://www.sagepub.co.uk/journal.aspx?pid=105523

An alternative approach to estimating the economic impact of sports events (Australia, 2006)

Authors

Dwyer, L; Forsyth, P and Spurr, R

Date

2006

Keywords

Economic impact, sport events

Country of research

Australia

Summary of findings

This article presents and illustrates an alternative approach to the estimation of the economic impact of sports events.

The authors illustrate the methodological deficiencies of the widely used input-output approach, arguing that it over-estimates the net benefits of events because of unrealistic assumptions underpinning the model: it assumes that there are no constraints limiting the capacity of industry to expand production to meet the additional demands of visitors; it assumes that change in output of an industry will lead to proportional change in the quantities of its intermediate and primary inputs for a given output each of these inputs will be a fixed proportion of the total with no substitution between inputs; the constant technical coefficients used in input-output analysis assume away changes in input mix due to price-induced substitution between factors. Input-output analysis assumes that all resources and inputs are provided freely and that no resource constraints exist, but prices of inputs and ages get bid up and other activity is discouraged.

For these reasons the authors propose an alternative approach – computable general equilibrium models (CGE). This approach models the whole economy treating it as an integrated network of markets, each of which impacts on the others and pay attention to underlying resource constraints and feedback effects, modelling the negative as well as the positive impact arising from changes in demand.

The authors illustrate their argument by comparing the two approaches to the estimation of the economic impact of the Formula 1 Grand Prix in Melbourne, which has a total expenditure injection of A$51.25 million. The input-output approach, which generated positive impacts on all industries estimated an A$111.96 million addition to output, with a net change in Gross State Product (GSP) of A$38.90 million. The CGE estimate of GSP was A$19.41 million and reduced employment in some industries. The input-output model projected an increase in employment of 521 FTEs in the state and 592 throughout Australia. The equivalent CGE projections were 318 and 129. The input-output estimated a net impact on the Australian GDP of A$43.27 million, compared to the CGE estimate of a significant negative impact. The authors then provide a conceptual discussion of the core concepts underpinning the estimation of the event–related economic benefits and wider economic impacts (which must include additional cost factors needed to produce additional output and thereby reduce the net economic benefits).

The authors argue for the need to adopt a cost-benefit approach to the evaluation of sports events (including aspects of consumer surplus) and this should also include the impacts on neighbouring areas, or the national economy (where national governments subsidise the event). The authors conclude that a CGE approach should be used regardless of the size of the event and the effects outside the local area should not be ignored.

Methodology

Economic impact analysis, input-output analysis, Computable General Equilibrium (CGE) modelling

Source of reference

Tourism Review International, 10, 207-216

The economic impact of visitors at major multi-sports events (Germany, 2005)

Authors

Preuss, H

Date

2005

Keywords

Sports events; major events

Country of research

Germany

Summary of findings

This article draws on a range of research to provide clarification of a number of issues which must be considered in determining the economic impact of major multi-sports events on a city or region.  It stresses the need to take account of both economic impact and opportunity costs relating to a range of visitors and those deterred from visiting.

The author distinguishes between the various economic impacts of  10 different types of  groups and emphasises the need to define accurately the region of impact and to distinguish between 'new' money and local spending.  An economic impact  model is proposed which takes the following into account:

Changes in the endogenous consumption of residents;
Crowded-out visitors and residents leaving because of the event;
Endogenous consumption that would have occurred anyway
The change in exogenous consumption of visitors who would have been in the area without the event.

 These distinctions are combined with a distinction between four expenditure effects - benefits; costs; reallocations and neutrals and the fact that analysis must take into account pre- and post-event periods.  The distinctions and analysis are illustrated by using data from previous studies of relevant events (Manchester Commonwealth Games; Athens Olympic Games; Salt Lake City Winter Games).

The author then outlines the broad approach required to collect empirical material for what is admitted to be a complex theory.  This requires surveys before, during and after the event, and the author identifies the locations at which such surveys need to be undertaken and the range of expenditure data required from each group.

The most difficult assessment relates to those tourists who would have visited if the event had not occurred, although a potential solution based on long term hotel occupancy rates is proposed.

Methodology

Secondary analysis

Source of reference

European Sport Management Quarterly, 5(3), 281-301

Web reference

http://www.tandf.co.uk/journals/titles/16184742.asp

The economic impact of Rangers and Celtic's regular season football (UK, 2007)

Authors

Allan, G; Dunlop, S and Swales, K

Date

2007

Keywords

Sports events, sports tourism, cities

Country of research

United Kingdom

Summary of findings

This article reports on research into the economic impact of sports tourism expenditures associated with attendance at Celtic FC and Rangers FC.  The authors suggest that regular season sporting competitions have significant advantages over large scale events: no bidding costs; use existing infrastructure; need less public support; avoid seasonality.  The authors suggest that research into the regional and national economic value of such competitions is limited and seek to address some gaps in knowledge.  The article provides a brief review of the concept of and research on sports tourism and its application to Rangers and Celtic fans.

With access to the clubs' databases of season ticket holders the researchers constructed a stratified sample of 2,000 supporters per club.  The postal questionnaire circulated in Autumn 2004 (after the end of the 2003-04 season) collected information on 'typical' expenditure on travel, accommodation food/drink, merchandising at home and away games in Scotland, away games in Europe and any games in England.

The sports tourism element of the support is illustrated by the fact that 66 per cent of season ticket holders come from outside Glasgow (8% from outside Scotland).  For the basis of their calculations, the authors assumed that the regional distribution of fans at home and away matches corresponded to the regional distribution of season ticket holders.  This gave a net flow of over 2 million spectator attendances into Glasgow in the 2003-4 season, with 90 per cent coming from the rest of Scotland and the remainder from the rest of the world.

The authors present a detailed breakdown of the various categories of expenditure for home and away games, which forms the basis for their calculations of the aggregated spend.  In order to calculate the expenditure of non-Old Firm supports (i.e. away fans visiting Glasgow) the authors have assumed that their expenditure is broadly similar to that of Old Firm supported on their away visits (an admitted crude assumption).  At Old Firm matches in 2003-04 spectators from Scotland spent just over £89 million attending matches, with non-Glaswegians accounting for almost 80 per cent of this. The authors conclude that having the Old Firm has a direct expenditure impact for Glasgow similar to hosting and Olympic games every 12 years.

Using Scottish Input-Output tables for 2002 the authors then calculate the multiplier effects of this expenditure via both indirect impacts and induced effects, taking into account the fact that expenditure by Scottish residents is in effect displaced and not new expenditure.  The authors claim that their approach is an improvement on the methodology outlined in UK Sport (2004) as they are able to estimate indirect and induced effects and quantify the impacts on GDP, income and employment.

Their calculations indicate that the net tourism impact during the 2003-4 season was: generated GDP of £43.35 million and 2,580 FTE jobs in Scotland, with the equivalent figures for Glasgow being £45.68 million and 2,423;  displaced expenditure produces uniformly negative employment and GDP results and falls heavily on the rest of Scotland; the rest of the world spectators generate the largest net impact; the net impact is heavily concentrated on the Glasgow economy with the effect on the rest of Scotland broadly neutral.

Methodology

Postal survey, statistical analysis

Source of reference

Journal of Sport and Tourism, 12(2), 63-97

Web reference

http://www.tandf.co.uk/journals/titles/14775085.html

The economic impact of sports stadiums (US, 2005)

Authors

Santo, C

Date

2005

Keywords

Economic impact; regeneration; urban; cities; facilities; professional sport.

Country of research

USA

Summary of findings

This article questions the general view that there is no positive relationship between investment in sports facilities in US cities and economic development by emphasising the importance of, especially the new breed of sports facilities designed to serve as architectural symbols with tourist appeal and act as a catalyst to urban developments.

The author reviews two previous analyses which conclude that the presence of sports teams and stadia have a potentially negative impact on metropolitan area economies, suggesting that these findings are flawed because they use out-of-date data. In particular they do not use data relating to the new type of stadia built in the 1990s.

To test this hypothesis the author adopts the previous, cross-sectional time-series, methodology, but recasts it with a more current set of data (1984-2001) and excludes older, more utilitarian stadia from the analysis. Nineteen metropolitan statistical areas are included in the analysis, representing every city that either gained, or lost, an NFL or MBL team, or had a stadium construction or renovation for such a team between 1984 and 2001.

The results indicate that the presence of a new baseball stadium has a significant positive impact of regional income share (baseball facilities host ten times as many home games as football stadia, generating more economic activity).

The author stresses the importance of certain contextual issues - location (downtown/suburbs) and the impact of attracting new teams. He explores the possibility that previous analyses were flawed because of limitations in the methodology or because of omitted variables, but concludes that the differences with previous analyses is that the context and nature of facilities has changed.

Methodology

Secondary analysis

Source of reference

Journal of Urban Affairs, 27(2), 177-191

Web reference

http://www.blackwellpublishing.com/journal.asp?ref=0735-2166&site=1

The value of sport to the English economy in 2003 (England, 2007)

Authors

Sports Industry Research Centre

Date

2007

Keywords

Sports provision; sports consumption; economy; economic activity.

Country of research

England

Summary of findings

This report is based on an economic model based on national income accounting and the income and expenditure flows between sub-sectors of the economy to estimate the value of the sports economy to the economy in England. 

It provides data on sports-related income and expenditure for the following sub-sectors: consumers (personal and household); commercial sport (spectator sports clubs, sports good manufacturers and retailers; sport TV, sport publications);  commercial non-sport (suppliers for the production of sport-related goods and services to the sports sector, including sponsorship and advertising);  voluntary sector (non-profit making companies and clubs run by participants);  local government (including taxes, grants and wages on sport related activities);  Outside the Area (all transactions with economies outside England). 

The report also provides data for the nine English regions.  Based on gross value added, the report indicates that, based on current prices, sports-related economic activity increased from £3,358 million in1985 to £13,531 million in 2003 - a real increase of 107 per cent (compared to a 59% increase in the UK economy). 

The sport-generated value added was greater than the combined output of radio and TV, music and the visual and performing arts, video, film and photography, designer fashion and arts and antiques sectors.  Sport-related employment is estimated at over 421,000 (1.8% of all employment). 

A series of appendices provides details of all statistical sources, model outputs and detailed breakdowns for each sub-sector.

Methodology

Economic impact analysis

Source of reference

Sport England

Web reference

http://www.sportengland.org/research/economic_importance_of_sport.aspx

The economic significance of sport in Flanders (Belgium, 2000)

Authors

Taks, M and Kesenne, S.

Date

2000

Keywords

Sports provision; sports events; sports consumption; sports tourism

Country of research

Belgium

Summary of findings

This study, based on a representative sample of 512 households, measures the share of the sports sector in the regional economy of Flanders by means of expenditure related to active sports participation and spectator sport. In contrast with the more common cost-benefit approach this study adopts a macro-economic approach.

Data were collected on socio-demographic factors, family sports participation profiles (at least once in previous year, accounting for 80% of families) and all sports-related expenditure (including PE and school-sport).

Data on all levels of public expenditure were collected via an analysis of budgets and invoices (again, including PE and school sport). The authors conclude that total expenditure in sport is more than 3 per cent of all consumption and investment in Flanders.

Comparing these data with previous work the authors conclude that, in the past 15 years, household expenditure on sport has increased (increased participation; increased travel costs for sports tourism), while government expenditure has stagnated (reduced capital investment and reduced subsidies).

The authors comment on the limitations of some data sources and the absence of others.

They conclude that government intervention remains necessary for setting the legal context, financing the construction and maintenance of a variety of sports facilities and for lowering the price-threshold for low-income families.

Methodology

Macroeconomic impact analysis

Source of reference

Journal of Sport Management, 2000, 14, 342-365.

Sport and economic regeneration in cities (UK, 2005)

Authors

Gratton, C; Shibli, S and Coleman, R

Date

2005

Keywords

Economic impact; regeneration; urban; urban regeneration; cities; facilities; sport events; major events; sports tourism.

Country of research

United Kingdom

Summary of findings

This article analyses the justification for investment in sport as part of  strategies for the economic regeneration of cities and assesses the success of  a number of specific cases.

The authors note a shift from the welfare driven investments of the 1970s and 1980s to a focus on using sport to change the image of cities, attract tourists, and encourage inward investment. 

This article reviews evidence of the benefits generated across a range of sport events form large spectator events staged as part of domestic professional teams to World and Olympic championships.

The authors provide a review of previous research on sport and urban regeneration, illustrating the difficulties in arriving at a simply profit and loss account for a specific event, with indirect and non-economic benefits often being an important consideration.  They outline a proposed 'balanced scorecard' approach to event evaluation. balance between direct and review literature which suggests that the impacts of events may be negative - especially if it is not embedded in wider strategies and taken solely for political reasons. 

The authors review the evidence relating to the impact of city sports strategies in North America, using public money to provide stadia for franchised sports teams.  They conclude that such strategies do not contribute substantially to economic regeneration, although more broadly based sports-led strategies have been more successful. 

The authors then review UK evidence based on their work for UK Sport (Measuring Success 2: the Economic Impact of Major Sports Events).  This reviews 16 sports events ranging in size from junior to world championships, illustrating the wide variety of economic impacts, based largely on the balance between spectators and participants.  They also provide a detailed case study of the 2002 Manchester Commonwealth Games, concluding that despite the difficulties in assessing impacts, the Games represented a clear economic boost for the area.  They provide a review of the limited evidence about longer-term benefits of hosting major sports events - illustrating possible differences between the Winter and Summer Olympics.  They also prive a case study of investment in the motorsport industry by a regional development agency.

The authors conclude that sport has the potential to generate substantial economic and social returns to local and regional areas, however, this is dependent upon the type of event [see Measuring Success 2: the Economic Impact of Major Sports Events in this section of the Monitor for the typology]. 

More generally they conclude that benefits are more obvious where the investment comes from outside the local community (eg national government, National Lottery).  Where the money is provided from local taxpayers, the question arises whether other projects might have provided better returns to the community.  There is a need for research to concentrate on the longer-term urban regeneration benefits that sport has the potential to deliver.

Methodology

Secondary analysis of economic data

Source of reference

Urban Studies, 42(5/6), 1-15

The economic importance of sport in Scotland 1998 (Scotland, 2005)

Authors

Leisure Industries Research Centre

Date

2001

Keywords

Sports provision; major events; sports tourism; regeneration

Country of research

Scotland

Summary of findings

This report is based on a spreadsheet model developed by the Leisure Industries Research Unit. The model is based on published data and derives:

  • Sports-related consumer expenditure (participant sports, clothing, travel, TV rental, gambling and 'other')
  • Relevant sectoral accounts (commercial sport
  • Commercial non-sport, voluntary sport
  • Central government, local government)
  • Value-added and employment. It also examines the impact of major events and sports tourism.

Methodology

Economic impact analysis

Source of reference

Leisure Industries Research Centre, The economic importance of sport in Scotland 1998, Edinburgh: sportscotland; 2001, Research digest no 60.

11 reasons for inaccuracies in economic impact analysis of sports (US, 1995)

Authors

Crompton, JL

Date

1995

Keywords

Sports provision; sports events; major events; facilities

Country of research

United States of America

Summary of findings

Research suggests that many economic impact analyses report inaccurate results, in part because the motives of those commissioning studies leads to the generation of economic impacts that support their position.

On the basis of an assessment of 20 studies and a comprehensive review of published sport economic impact literature, the author identifies eleven sources of error. The eleven major errors are:

  1. using sales instead of household income multipliers
  2. misrepresenting employment multipliers
  3. using incremental instead of normal multiplier coefficients
  4. failing to accurately define the impacted area
  5. including local spectators
  6. failing to exclude "time-switchers" and "casuals"
  7. using "fudged" multiplier coefficients
  8. claiming total instead of marginal economic benefits
  9. confusing turnover and multiplier
  10. omitting opportunity costs
  11. measuring benefits while omitting costs.

The author concludes that despite its weaknesses and limitations, economic impact analysis is a powerful and valuable tool if it is implemented knowledgeably and with integrity.

Methodology

Review article

Source of reference

Journal of Sport Management, 1995, 9, (1), 14-35.

The economic impact of major sports events in Sheffield and Glasgow (UK, 2001)

Authors

Shibli, S and Gratton, S

Date

2001

Keywords

Sports events; major events; cities

Country of research

United Kingdom

Summary of findings

Compares the economic impact of two major sports events on the cities of Sheffield and Glasgow using an identical research instrument and methodology at each event (although economic impact was not a stated objective of either event). The additional spending ratios for the International Amateur Athletics Federation (IAAF) Grand Prix  in Sheffield, and the European Junior Swimming Championships in Glasgow, were £2.96 to £1 of cost and £2.03 to £1 respectively. The total spend in each city was broadly similar, but the manner in which these sums was generated was radically different, reflecting the fact that the Sheffiled event was spectator-driven and the Glasgow event was competitor-driven. Other differences included the timing, duration, and scale of events. The authors stress that authorities should be using comparable data sets from relevant events (e.g. spectator or competitor dominated) to derive some parameters by which to estimate the potential impact of future events and integrating economic impact objectives into their overall event appraisal.

Methodology

Survey data, post-event desk research, interview data

Source of reference

In: Gratton, C and Henry, IP (eds), Sport in the city: the role of sport in economic and social regeneration, London: Routledge; 2001, 78-89, ISBN 0-415-24349-1.

Potential economic impact of the Sydney Olympic Games (Australia, 1997)

Authors

Madden, J and Crowe, M

Date

1997

Keywords

Sports events; major events; sports tourism

Country of research

Australia

Summary of findings

This report, by the New South Wales (NSW) Treasury, provides a systematic analysis of the potential economic impact of the Sydney Olympic Games. It considers three phases: the pre-Games preparation and construction phase; the Games year; the post-Games phase (20001/02 to 2005/06). It It considers a range of factors: direct impacts (construction expenditure, additions to tourism, exports of television pictures, ticket and souvenir sales); conditions in the labour market; government macro-economic policy; sources of finance for the Olympics; the impact of the Games on productivity; the impact of the Games in terms of increasing the demand for Australian produce. It estimates that the NSW gross state product will be more than half a per cent higher in the construction period, with a $1.7 billion expansion in NSW gross state product in the Games year and 24,000 additional jobs. The report details a range of assumptions which need to be considered in such calculations and outlines a seies of measures required to maximise economic returns. It also provides a comparison with a KPMG study, illustrating what it regards as weaknesses in the KPMG estimates of economic impact.

Methodology

Estimated economic impacts

Source of reference

Madden, J and Crowe, M, Economic impact of the Sydney Olympic Games, University of Tasmania, Office of Financial Management: NSW Treasury and The Centre for Regional Economic Analysis; 1997, Research and Information Paper.

Economic benefits of physical activity in the Swiss population (Switzerland, 2001)

Authors

Martin, BW; Beeler, I; Szucs, T; Smala, AM; Bruegger, O; Casparis, C; Allenbach, R; Raeber, PA and Marti, B

Date

2001

Keywords

Sports provision; physical health; physical activity; sport

Country of research

Switzerland

Summary of findings

This is an initial attempt to investigate the economic benefits of the health-promoting effects of physical activity in the Swiss population. On the basis of conservative assumptions inadequate physical activity among about one third of the population is responsible annually for 1.4 million cases of disease, almost 2,000 deaths and direct treatment costs of 1.6 billion Swiss francs.

The study expresses the risks associated with activity and sport in economic terms, with about 300,000 sporting accidents per year causing 160 deaths and incurring direct treatment costs of 1.1 billion Swiss francs.

The authors suggest that measures aimed at risk control and accident prevention in sport should be continued and intensified according to the specific needs so that the desired result of increased activity and sport does not also lead to higher accident rates.

Methodology

Literature review, survey data

Source of reference

Schweizerische Zeitschrift fur Sportmedizin und Sporttraumatologie, 2001, 49, (3), 131-133.

The economic impact of six major sports events (UK, no date)

Authors

UK Sport

Date

No date

Keywords

Sports events; major events

Country of research

United Kingdom

Summary of findings

This report gives the results of research into the varying economic impacts of six major sports events in the United Kingdom between May and August 1997 – World Badminton Championships (Glasgow), European Junior Boxing Championships (Birmingham), England vs Australia Cricket Test Match (Egbaston), International Athletics (Sheffield), European Junior Swimming Championships (Glasgow) and Women's British Open Golf Championship (Sunningdale). The report presents detailed evaluations of the economic impact of these events at local, regional and national levels. The report also provides an account of the research methodology and multiplier analysis. The objectives of the survey research were:

  1. To quantify the proportions of survey respondents who live in the host city and those from outside.
  2. To group respondent types by their role at the event (media, spectator, competitor, official).
  3. To identify characteristics of respondents from outside the host city by gender, party size and place of domicile.
  4. To determine the catchment area of the event by local, regional, national and international responses.
  5. To quantify the number of people from outside the host city staying overnight and from this to quantify how many are staying in commercially provided accommodation and for how many nights, the cost of the accommodation and all other spend.
  6. To qualify spend per day for overnight and day visitors.
  7. To quantify how much people had budgeted to spend and on how many other people this expenditure will be made.
  8. To establish the proportion of people whose main reason for being in the host city is the sporting event.
  9. To determine if any respondents are combining their visit to the host city with a holiday.

The principle of the multiplier analysis is explained by which the total amount of additional expenditure in the host city/area is converted to a net amount of income retained after allowing for 'leakages' from the local economy (although the problems of this approach are acknowledged).

Finally a typology of major sports events is presented based on the balance between competitors and spectators, associated spending patterns and relative economic impact.

  1. Irregular, one-off, major international spectator events generating significant economic activity (e.g. Olympics).
  2. Major spectator events, part of an annual domestic cycle of sports events and which generate significant economic activity (e.g. FA Cup Final).
  3. Irregular, one-off, major international spectator/competitor events generating uncertain economic activity (e.g. World Championships in all sports).
  4. Major competitor events generating limited economic activity and part of annual cycle of sports events (e.g. national championships).

Methodology

Economic impact analysis

Source of reference

UK Sport, Major events: the economics measuring success - a 'blueprint' for success, London: UK Sport; no date.

The impact of Olympic Games on property markets (US and Australia, 2001)

Country of research

United States of America; Australia

Summary of findings

This report assesses the impact of four Olympic Games on real estate markets in Seoul, Barcelona, Atlanta and Sydney.  The report suggests that understanding the context of the host country's economy is important to assessing the impact of the Olympics on the local property market.  Consequently, direct comparisons between host countries are  erroneous.

The hosting of the Olympics has a significant and varied impact on the real estate market, but these impacts are largely indirect and experienced over a long time.  More direct, short-term impacts, are largely focused on the hotel and tourism sector.  Real estate impacts tend to be a consequence of decisions driven by other motivations, such as image and self-promotion, which provide indirect benefits to the sector.

The Olympics provides five long-term legacies that impact on the real estate markets:

  1. Urban regeneration - Atlanta and Sydney sought to use the Olympics as a catalyst to revitalise declining inner city areas
  2. Creation of new neighbourhoods - the Olympic Villages created in Seoul and Barcelona have become urban centres (including housing and retail)
  3. Improvements to city infrastructure - this included new sports stadia and facilities but included non-sport infrastructure such as airport extension/upgrade (Seoul, Atlanta, Sydney), airport rail links, fibre optic communication networks, new parks and improved pedestrian footpath
  4. Increasing environment/sustainable development - through improved public transport and use of solar energy (Sydney Olympic Village and stadia)
  5. Growth in tourism and convention industries through tourism promotion

The Olympics have varying impacts on different real estate sectors - hotel, residential, office and retail.  The greatest impact was on the hotel sector, with all four host cities experiencing a direct impact of Olympic visitor-related arrivals and demand for short-term accommodation.  All cities experienced an increase in international arrivals during the year of the Games, with Seoul recording a growth of 18% and Sydney 11%.  All four host cities experienced a growth in room supply in the two years leading up to the Games (room supply almost doubled in Barcelona and increased by an average 35% in the other host cities), mostly in the international standard segment (four star and above).  Due to increased room supply  the host cities suffered a decline in average occupancies in the Olympic year, although this was offset by increased room rates.   Hotel performance post-Games has varied as the markets resumed their normal cycle, with Barcelona experiencing a 60% decline in revenue per room available in the two years following the Games.

The Olympics has two potential impacts on the residential real estate sector:

(a) a short-term boost to rentals and prices in certain areas

(b) a longer-term impact in terms of new centres and the upgrading of new housing stock.

The extent of any short-term impact on rents and prices is dependent upon the size and maturity of the housing market.  Seoul and Barcelona experienced rapid increases in house prices and rentals, while Atlanta and Sydney experienced little or no Olympic-related boost.  In Barcelona, the Olympics was cited as a major contributor to 250-300% increases in residential values between 1986 and 1993.  However, the major impact on residential real estate is through the creation of new districts around the Olympic corridor, most noticeably in Seoul and Barcelona where new Olympic Villages were constructed.  In Barcelona residential construction increased by 23% between 1988 and 1991.  The impact on the office real estate market has been mixed with the greatest impact on the smaller, less mature markets.  Of the four real estate markets, the Olympics probably has the least impact on the retail market, although the most direct impact has been a short-term boost to retail spending resulting from increased tourism.  The Olympics has not resulted in significant levels of additional construction in this sector.

Methodology

Secondary sources

Source of reference

Jones Lang LaSalle

Web reference

www.joneslanglasalle.com

The economic impact of the 1994 World Cup (US, 2004)

Authors

Baade, RA and Matheson, VA

Date

2004

Keywords

Sports events; sports tourism; major events; cities

Country of research

United States of America

Summary of findings

This article presents an ex post comparison with the ex ante estimates of the economic impact of the 1994 World Cup in the USA.  It provides a broad summary of some previous research on the economic impact of mega events and outlines a number of theoretical limitations of many of these analyses: using gross rather than net income; ignoring the 'substitution effect' in which potential visitors are deterred by congestion and high prices; problematic multipliers to measure indirect spending; and, the ignoring of leakages from local economies.  They suggest that a balance of payments approach is used that examines the extent to which an event gives rise to money inflows and outflows that would not occur in its absence.

Drawing on past work on metropolitan growth they seek to identify how much growth in economic activity in US cities hosting the World Cup is attributable solely to the event.  The authors develop a statistical model based on historical data on growth, taxation and income in host cities between 1970 and 2000.  Assuming that any difference between actual and predicted income can be accounted for by the World Cup the authors calculate a dollar estimate of its impact.  Although there are substantial variations, the model estimated that the average host city experienced a reduction in income of $712 million relative to predictions, with an overall reduction in income for all host cities of $9.26 billion relative to predictions - this is compared to the World Cup predictions of $4 billion additional income.

The authors admit that not all variables are accounted for, that even small margins of error will lead to substantial differences in income estimates, that these numbers may be biased downwards due to poor economic performance of two of the largest cities and that some of the non-host cities may have experienced higher than expected growth as non-soccer related tourism business was diverted from congested host cities.  Nevertheless, they suggest that the identification of an overall negative impact is broadly accurate.  Part of the explanation is that, games are spread out over a number of weeks the 'crowding out' effect will not be related solely to the days on which the games are held; convention business will be lost; residents' spending will be altered; and, television keeps people at home to watch the games.

Methodology

Secondary analysis of economic data

Source of reference

Regional Studies, 2004, 38(4), 343-354

Web reference

http://www.tandf.co.uk/journals/titles/00343404.asp

The economic impact of Euro '96 (England, 1997)

Authors

Dobson, N; Gratton, C and Holliday, S

Date

1997

Keywords

Sports events; sports tourism; major events; regeneration; cities

Country of research

England

Summary of findings

The overall economic impact of the staging of Euro '96 in Britain and in the local and regional economies of each of the host cities is assessed. Euro '96 had a significant effect on the UK economy considering that the tournament only lasted for three weeks. The additional expenditure generated by spectators and media attending games was calculated at £195 million, with significant additional expenditures associated with those watching the games on television. The general conclusion was that a spectator intensive event can have a significant economic impact on local economies as a result of the additional expenditure generated by event-related tourists. Further, those cities and towns not directly hosting the tournament were also substantial beneficiaries of the additional expenditure generated.

Methodology

Survey, interview and secondary data analysis

Source of reference

Dobson, N; Gratton, C and Holliday, S, Football came home: the economic impact of Euro '96, Sheffield: Leisure Industries Research Centre; 1997, ISBN 086 339 750 6.

Higher medical costs linked with physical inactivity (US, 2000)

Authors

Pratt, M; Macera, CA and Wang, G

Date

2000

Keywords

Healthcare costs; physical activity.

Country of research

United States of America

Summary of findings

This presents a cross-sectional analysis of the of the 1987 National Medical Expenditures Survey that included US civilian men and non-pregnant women aged 15 and over who were not in institutions.  The sample of 35,000 was drawn from 14,000 households and the analysis is based on 20,041 (52% women; 85% white).  Data were collected on socio-demographic factors, health status, use and expense of medical care and health-risk factors (eg regular physical activity and smoking status).  Because respondents might have been unable to report accurate costs of medical care - costs were confirmed via an additional survey of medical providers.  The analysis examined direct medical expenses of active and inactive men and women.  'Physically active' was defined as at least half an hour moderate/strenuous physical activity three or more times per week (57% of sample); 'smokers' were those who had smoked at least 100 cigarettes: 45%; 29% current smokers) and 13 per cent were obese (BMI: 30KG/m2).

The authors identify real and substantial medical cost differences between the physically active and inactive.  Consistent costs savings for regularly active people were observed for men and women, smokers and non-smokers, those with and without physical limitations and young and old (fewer physician visits; fewer hospital stays; less medication).  The largest difference in direct medical costs was among women 55 and older, indicating that the health gain associated with physical activity is especially high for older women.  Even among participants reporting limitations in carrying out moderate physical activities, medical costs were lower among those who were regularly active (some of this may be accounted for by less severe health limitations, but may also reflect a benefit of physical activity).

The authors admit that, although  causality cannot be determined from a cross-sectional study, the data suggest that increasing participation in moderate physical activity among sedentary adults may reduce direct medical expenditures -  between $300 and £1,053 per person  per annum  - a US saving of $76.6 billion at 2000 prices.  The authors accept that additional economic analyses and longitudinal studies are needed to define both direct and indirect costs associated with physical activity.  They conclude that their data indicate substantial medical costs differences between active and inactive people and that this emphasises that the reduction of  physical inactivity is a public health priority.

Methodology

Survey data

Source of reference

The Physician and Sportsmedicine, 2000, 28(10)

Web reference

http://www.physsportsmed.com/journal.htm

The role of six major sports events in economic regeneration of cities (UK, 2001)

Authors

Gratton, C; Dobson, N and Shibli, S

Date

2001

Keywords

Sports events; major events; regeneration; cities

Country of research

United Kingdom

Summary of findings

The economic importance of major sporting events is discussed using data from six major sports events staged in the cities of Sheffield, Birmingham, and Glasgow between 1996 and 1999. The total additional expenditure and the average additional visitor expenditure per event day is measured and compared across events. The general conclusion is that some major sport events have the potential to generate significant ecnomic impact in the local economy of host cities. It is important to recognise that there is a wide variation across sports events in their ability to generate economic impact. A typology of major sports events is presented in order to explain such variations:

(i) Irregular, one-off, major international spectator events generating significant economic activity (eg Olympics).

(ii) Major spectator events, part of an annual domestic cycle of sports events and which generate significant economic activity (eg FA Cup Final).

(iii) Irregular, one-off, major international spectator/competitor events generating uncertain economic activity (eg World Championships in all sports).

(iv) Major competitor events generating limited economic activity and part of annual cycle of sports events (eg national championships).

The authors stress that the parameters of the economics of staging major sports events are only just beginning to be understood. It will be possible to identify with more certainty the parameters of events that categorise their economic significance as more economic impact studies are conducted.

Methodology

Economic impact analysis

Source of reference

In: Gratton, C and Henry, IP (eds), Sport in the city: the role of sport in economic and social regeneration, London: Routledge; 2001, 35-45.

The economic impacts of 16 major sports events (UK, 2004)

Authors

Sport Industry Research Centre

Date

2004

Keywords

Sport; major events; cities

Country of research

United Kingdom

Summary of findings

This report gives the results of research into the varying economic impacts of 16 major sporting events (5 of which were included in the previous UK Sport publication, Major Events: Measuring Success).  The structure of the report is as follows:

(i) Key findings -This provides some general data from all 16 events, which indicate that major sports events can have a significant economic impact on host communities - ranging from £0.18 million of additional expenditure for the half-day IAAF Grand Prix Athletics event to £25.5 million attributed to the Flora London Marathon.

(ii) Economic Impact - This section presents an event typology based on varying mixes of spectators and participants - a mixture central to the nature of the economic impact.

(iii) Methodology - This provides a broad outline of the methodology used (a fuller version can be found in the Major Events publication).

(iv) Results at a macro level - This provides detailed comparative graphical information on the absolute economic impact of each event, the impact per day visitor and organisational spend, visitor/spectator/other expenditure.  It also explores the key determinants of economic impact for each event and the relative proportions of non-local and local spectators at each event.  It concludes by identifying the type of events which make the largest economic impact - major spectator events, with visitors from outside the immediate area.

(v) Spending levels and patterns of key groups - This provides comparative data for daily/subsistence and other expenditure of competitors; team delegates; officials; media representatives; spectators.

(vi) Exports, imports and new money - This relates to the balance of spending in British economy from overseas visitors, relative to the money leaving the British economy by way of invisible imports in organising the event.  This analysis is applied to the Flora London Marathon and the European Show Jumping at Hickstead.  The 'net export effect' (ie benefit) of the FLM is estimated at £1,155,552 (4.2% of total economic impact), whereas the figure for Hickstead was -£1,784.

(vii) Lottery Funding - This section examines spectators' feelings on the use of lottery funds to support major sporting events (overwhelmingly positive); the additional expenditure return for every £1 of lottery support (ranging from £2.71 to £41.66); commercial bed nights at Lottery supported events.

(vii) Accuracy of EI forecasting model - The findings from the initial six events were used to develop a forecasting model and this section compares pre-event forecasts with the actual outcome for 6 further events.  The accuracy of the forecasts range from 64 per cent to 79 per cent, with the greatest accuracy being for the smaller events.  Explanations for the variance are 'rate variance' (daily spend) and 'volume variance' (predictor numbers of all types at events).

(viii) Additional benefits - This section provides examples of non-economic benefits, such as television coverage, place marketing, sports development.

Methodology

Economic impact analysis

Source of reference

Sport Industry Research Centre (2004) Measuring success 2: the economic impact of major sports events, London, UK Sport

Web reference

www.uksport.gov.uk

The economic and social impact on Wales of the 1999 Rugby World Cup (Wales, 2001)

Authors

Jones, C

Date

2001

Keywords

Sports events; major events; sports tourism

Country of research

Wales

Summary of findings

This, mostly qualitative, paper explores the nature of the economic and social impact on Wales of the 1999 Rugby World Cup (RWC).

It provides a brief review of relevant literature on economic impact and explores the various impacts of mega-events.

Although the hosting of the event had several positive (if difficult to measure) impacts, the fact that many of the games took place outside Wales reduced its economic and social impact.

Methodology

Literature review

Source of reference

International Journal of Tourism Research, 2001, 3, 241-251.

Web reference

http://www.wileyeurope.com/WileyCDA/WileyTitle/productCd-JTR.html

Olympic Games: catalyst of urban change (England, 1998)

Authors

Essex, S and Chalkley, B

Date

1998

Keywords

Sports events; major events; urban impact; cities

Country of research

England

Summary of findings

This article explores the role of various Olympic Games as catalysts for urban change and urban policy.The paper reviews the effect of the Games on the built environment from 1896-1996 and assesses the preparations for the Sydney Olympics.

The authors divide the games into three broad types - low impact; those focused mainly on additional sports facilities; games stimulating transformations of the built environment. As they have expanded in size, the games have increasingly been used as a trigger for a wide range of urban improvements (e.g. the need for the improvement of transport systems to cater for greatly increased visitor numbers), although there has been considerable variations in the scale of infrastructural investment and the mix of public/private investment. For example, Barcelona used a mixture of Olympic, government and private funds for major transport and renewal projects, whereas the Los Angeles and Atlanta games constrained general infrastructural programmes and concentrated spending on sports facilities.

The authors raise issues about the potentially negative distributional effects of the games at local and international levels. However, they conclude that the Olympic Games may be said to accelerate certain change rather than initiate it, but that it is reasonably safe to assume that few of the sporting and other facilities would have been provided in anything like their present form simply to meet local needs. In relation to wider investments in transport and environmental improvements it seems probable that they would not have occurred without the Olympics resources and political pressures.

The authors conclude that the Olympics seem set to continue as a major arena for inter-city competition, with the increased intensity of the bidding process mirroring the combined effects of trends in globalisation, the mass media audience, post-Fordist economics and the perceived costs and benefits of hosting the Olympics.

Methodology

Secondary analysis of official Olympic reports

Source of reference

Leisure Studies, 1998, 17, 187-206.

Web reference

http://www.tandf.co.uk/journals/routledge/02614367.html

Measuring the net economic impact of the Davis Cup (France, 2007)

Authors

Barget, E and Gouguet, JJ

Date

2007

Keywords

Economic impact, sports events.

Country of research

France

Summary of findings

This article presents a case study of a major sporting event – the Davis Cup – to illustrate the potential of a methodology which combines both positive and negative externalities in order to measure the total economic value of an event.  Drawing on concepts from environmental economics the approach seeks to measure the real net utility created as a basis for deciding if an event should be publicly subsidised and at what level.

The authors outline a typology of sporting events based on their frequency, economic value and ownership and suggest that events can be either wholly commercial of 'general interest', in which social utility justifies public subsidy.  They outline three kinds of positive/negative effects: positive/negative social cohesions; improving/deteriorating public image of area; improved facilities and environment/deterioration of environment and quality of life.

They argue that the total economic value of an event must take into account: the use value (i.e. the value felt by the consumer); optional value (possibility of benefiting from an event in the future); legacy value; existence value (utility that individual derives from knowing that event exists).  These various utilities can be assessed via a range of techniques: substitution markets (travel costs taken to express value attached to an event); hypothetical market (contingent valuation method (CVM) measuring people's willingness to pay); indirect methods (calculate cause/effect relationships and associated costs).

The authors apply these techniques to a survey-based evaluation of a Davis Cup Quarter Final between France and Germany and estimate that the total social benefit of the event was just over 200,000 euros.

The authors outline the strengths and limitations of the travel cost method, the CVM and illustrate the various conceptual and statistical steps which they took to minimise the potential biases.  Despite seeking to overcome the short-comings of this cost-benefit approach the authors reject the cost-benefit analysis approach based on the monetarisation of values.  Certain people cannot attribute a monetary value to publicly held good and the approach treats them as consumers and not as citizens.  Consequently, they propose a combination of the CVM method and a deliberative approach (e.g. citizenship panels) which is better aligned with citizenship values.

Methodology

Economic impact analysis

Source of reference

Journal of Sports Economics, 8(2), 165-182

Web reference

http://www.sagepub.co.uk/journalsProdDesc.nav?prodId=Journal200938

Measuring the net economic impact of the Davis Cup (France, 2007)

Authors

Barget, E and Gouguet, JJ

Date

2007

Keywords

Economic impact, sports events.

Country of research

France

Summary of findings

This article presents a case study of a major sporting event – the Davis Cup – to illustrate the potential of a methodology which combines both positive and negative externalities in order to measure the total economic value of an event.  Drawing on concepts from environmental economics the approach seeks to measure the real net utility created as a basis for deciding if an event should be publicly subsidised and at what level.

The authors outline a typology of sporting events based on their frequency, economic value and ownership and suggest that events can be either wholly commercial of 'general interest', in which social utility justifies public subsidy.  They outline three kinds of positive/negative effects: positive/negative social cohesions; improving/deteriorating public image of area; improved facilities and environment/deterioration of environment and quality of life.

They argue that the total economic value of an event must take into account: the use value (i.e. the value felt by the consumer); optional value (possibility of benefiting from an event in the future); legacy value; existence value (utility that individual derives from knowing that event exists).  These various utilities can be assessed via a range of techniques: substitution markets (travel costs taken to express value attached to an event); hypothetical market (contingent valuation method (CVM) measuring people's willingness to pay); indirect methods (calculate cause/effect relationships and associated costs).

The authors apply these techniques to a survey-based evaluation of a Davis Cup Quarter Final between France and Germany and estimate that the total social benefit of the event was just over 200,000 euros.

The authors outline the strengths and limitations of the travel cost method, the CVM and illustrate the various conceptual and statistical steps which they took to minimise the potential biases.  Despite seeking to overcome the short-comings of this cost-benefit approach the authors reject the cost-benefit analysis approach based on the monetarisation of values.  Certain people cannot attribute a monetary value to publicly held good and the approach treats them as consumers and not as citizens.  Consequently, they propose a combination of the CVM method and a deliberative approach (e.g. citizenship panels) which is better aligned with citizenship values.

Methodology

Economic impact analysis

Source of reference

Journal of Sports Economics, 8(2), 165-182

Web reference

http://www.sagepub.co.uk/journalsProdDesc.nav?prodId=Journal200938

The economic impact of 10 major sports events (UK, 2006)

Authors

Gratton, C; Shibli, S and Coleman, R

Date

2006

Keywords

Sports events, major events, cities, regeneration.

Country of research

United Kingdom

Summary of findings

This article reviews the economic impact of ten major sports events in various UK cities between 1997 and 2002. It begins with a review of research evidence on the economic importance of the summer Olympic Games, illustrating that all so-called impact studies have been conducted before the Games, were not based on primary data and were usually commissioned by proponents of the Games. They illustrate that most informed commentators agree that the economic benefits are often exaggerated. However, if only the operational costs of the Games are taken into account (i.e. ignoring capital infrastructural cost) then many games have made a profit.

The authors also review research on other major sports events and suggest that they need to be evaluated as part of broader marketing and re-imaging strategies. Within this context they review the results of economic impact studies of ten sports events in six UK cities. The data were collected via a questionnaire survey of a sample of participants and key interest groups at an event.

The authors list a series of important analytical distinctions including between residents and non-residents if the hoist cities, those for whom the event was the main reason for visiting and the various categories of groups into which respondents fit (spectators, competitors, media and officials). The analysis is based on the direct impact attributable to additional expenditure and ignores multiplier based induced economic impacts.

The authors illustrate the wide range of economic impacts associated with a variety of sports events. Because the events were of variable duration the authors suggest that impact per day is a better basis for comparison and again the data illustrate a wide range of impacts.

The authors also emphasise that in order to assess properly the economic impacts of events it is necessary to include more than the spectators and collect data from competitors, delegates, officials and media and also to include organisational expenditure.  Again they illustrate the widely varying nature of the volume of such expenditure at the case study events and also the differing mixes of spectator and other forms of expenditure for each event. However, they conclude that the key determinant of the economic impact of an event is the number of spectators from outside the immediate area – spectator driven events are more preferable to competitor driven events. They also argue that a balanced scorecard approach is required which seeks to take often non-economic impacts into account (e.g. media coverage and place marketing effects and the impact on sports development).

They conclude with four considerations when seeking to maximise potential economic impacts: 

(i) The ability of an event to attract people from outside the host area and to reduce the deadweight percentage of those attending;

(ii)  The greater the number of spectators the more significant the economic impact;

(iii) Economic impact is not necessarily a function of the status of an event in world sporting terms; and 

(iv) The number of days of competition and the availability of local; commercial accommodation to allow visitors to extend their stay in the host area.

Methodology

Economic impact analysis

Source of reference

Sociological Review, 54(2), 41-58

Web reference

http://www.blackwellpublishing.com/journal.asp?ref=0038-0261

The impact on property prices of two new London football stadiums (England, 2011)

Authors

Ahlfeldt, GM and Kavetsos, G

Date

2011

Keywords

Economic impact; facilities; stadium impact; property prices.

Country of research

England

Summary of findings

This article investigates the impact on property prices of the New Wembley and Arsenal's Emirates stadia in London.  The authors refer to the general view that professional sports facilities tend to have a positive effect on location desirability and lead to increases in rents and property values.  They argue that the literature does not separate direct and indirect effects which also include negative effects related to congestion, noise and crime.  This paper focuses on isolating the channels through which stadium externalities capitalise into property prices.

The authors use two micro‐level property data sets from the Land Registry and the Nationwide Building Society to identify transaction prices for residential property between January 1995 and July 2008.  The choice of two stadia allowed the authors to overcome a range of limitations of previous studies.  In the case of the New Wembley, which did not move location and retained the same functionality, direct neighbourhood effects related to civic pride and external spending, but also crime and congestion did not change dramatically.  This permitted them to obtain an unbiased estimate on the (marginal) visual amenity effect of the new structure.  The  case of the Emirates, located about half a kilometre from the old site, provided a unique chance to disentangle stadium proximity effects from correlated location effects as the authors controlled for shocks that affect the whole neighbourhood and are correlated with distance to each of the sites, but not with the change in distance to the stadium.  For the new stadium they defined a view variable to identify properties with a potential for direct views on the structure so that this indirect effect can be isolated from direct stadium effects.

The article provides a broad overview of the urban economics literature on the impact of sports stadia on surrounding property prices and an historical overview around the construction of both stadia.

Their broad approach, utilising sophisticated statistical techniques, was to identify areas subject to stadium effects, estimate time‐varying treatment effects, define an intervention date, estimate an average stadium treatment effect and estimate the aggregated effect on housing value.

In the case of the New Wembley, there was a significant increase in property prices close to the stadium of up to 15%, which gradually decreased in distance to the stadium.  Even at relatively large distances of 3 km significant spillovers were still found.  Many of the direct external effects of the stadium, including positive effects related to civic pride and emotional attachments as well as negative externalities arising from increased noise, crime and congestion, are held constant.  Given the 'iconic' architecture, positive stadium effects are likely to be mainly driven by a 'visual amenity' effect.  The distinctive iconic element of the new stadium, a widely visible arch of about 130m high, can also explain the presence of significant stadium effect at relatively far distances.

In the case of the new Emirates Stadium they found a robust increase in property prices where distance to the stadium location is reduced, which is in line with positive (net‐) externalities.  The results indicate a 1.7% increase in property prices for any 10% decrease in distance to the stadium.  They found that price adjustments were considerably larger in areas that experienced an increase in stadium distance.  No view effects could be associated with the Emirates Stadium and the effects point to the existence of (a) significant effects related to the functionality of stadium, and (b) a negative externality that partially cancels out positive effects and may be related to the increased capacity and correspondingly increased noise, crime and congestion effects.  A negative externality emerging from spectators going to and away from the stadium could be identified using the change in their typical walkways after the stadium had moved, confirming that stadia are not only associated with positive but also negative neighbourhood externalities.

In both cases, they found an adjustment coinciding with the announcement of the final stadium plans, which supports the presence of anticipation effects and shows that real estate markets tend to value changes in the environmental quality of locations as soon as new information enters the market.

For all three stadium locations (including the old Arsenal), the estimated change in aggregated value amounts to about £1‐2 billion each, leaving a positive net‐effect to the neighbourhood of the New Wembley and a close to zero net‐effect to the broader neighbourhood of the Arsenal venues as the effects within the catchment areas of the Emirates Stadium and Highbury Road cancel out each other.

The authors conclude that the evidence supports both the presence of direct and indirect economic effects, stressing the role of architecture and urban design as a catalyst of stadium externalities and neighbourhood revitalization more generally.  Real estate markets tend to value the stadium effects in anticipation, which is an important finding for future intervention analyses, both within and outside the realm of the stadium impact literature.

Methodology

Property price analysis

Source of reference

Ahlfeldt, GM and Kavetsos, G (2010) Form or Function? The Impact of New Football Stadia on Property Prices in London. Unpublished.

Web reference

http://mpra.ub.uni-muenchen.de/25003/

The impact of two new UK sports stadiums on property prices (UK, 2005)

Authors

Davies, L.E.

Date

2005

Keywords

Economic impact; sports stadia.

Country of research

United Kingdom

Summary of findings

This mostly qualitative study examines the impact of the Cardiff Millennium Stadium and the City of Manchester Stadium on local property market.  Data were collected via interviews and a questionnaire survey about the expert opinion of property professionals and local interest groups and stakeholders. 

Issues explored included: the role of each stadium in regeneration; the types of development stimulated by stadium construction; the impact on residential and commercial properly; other positive and negative impacts; and the sustainability of impacts and policies necessary to stimulate further real estate development. 

A postal survey was undertaken with property agents and surveyors and valuers collecting information on: general impacts on the property market; specific impacts on residential and commercial property; development potential and land value; wider impacts and sustainability.  The response rate was a low 15%, with response declining by distance from stadia.

The limited data indicated that each stadium had had a positive impact on the residential property market.  In Manchester it had at the very least stabilised a spiral of decline.  However, most were cautious about the precise potential and long term impacts.  In Cardiff the impacts were also positive, but less than in Manchester.  There was a divergence of opinion as to whether the increases occurred in the construction phase or up to 2 years afterwards.  The view was that the Millennium Stadium had an impact on property prices up to 5 kilometres ways, whereas the equivalent Manchester figure was 1 kilometre.  In both cities most agreed that the stadia had contributed positively to the image of the areas and a sense of pride and that this had an indirect impact on residential property values.

The author concludes that although there are clearly some immediate positive impacts the longer term regeneration can depend on the usage of the stadia.  Careful management and organisation of regular football matches in Manchester and consideration of the local community is required if the impacts generated in the early stages are to be sustained.  The multi-event, multi-sport Millennium Stadium with less regular events has less potential for negative impacts.

Methodology

Interviews; postal questionnaire data.

Source of reference

Area, 37(3), 268-276

Web reference

http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1475-4762

A literature review of the impact of major events (New Zealand, 2007)

Authors

New Zealand Tourism Research Institute

Date

2007

Keywords

Sports events; major events; economic impact; sports tourism; communities; volunteering; participation.

Country of research

New Zealand

Summary of findings

This annotated bibliography was produced for Sport and Recreation New Zealand (SPARC) and contains a series of entries under four headings: Economic impacts; Socio-cultural Impacts; Environmental Impacts and Health Impacts.  It also lists the databases used and the methods adopted.  The summaries are as follow:

Economics

  • The majority of evidence arguing that events have a significant economic impact are likely to be premised on methodologically deficient studies, especially those commissioned by those benefitting from an event.

  • Economic Impact Studies should have full disclosure of methodologies and assumptions to permit critical analysis.

  • There is increasing scepticism in media, general public and academic circles of the ability for mega-events to provide economic impacts/benefits.  Efforts to justify support for an event for economic reasons alone is not encouraged.  There are winners and losers from mega events; not all stakeholders share equally in the distribution of an event's costs and benefits.  There is generally insufficient long-term, post-event planning conducted in the early stages of the event's development.

  • There is no agreement on the single best way to measure an event's economic impacts and benefits.  Cost Benefit Analysis (CBA) is generally considered superior to economic impact studies (EIS) because CBA emphasise opportunity costs.

  • Ex-post measures are superior to ex-ante measures when evaluating economic impacts/benefits.  Computed General Equilibrium (CGE) measures are gaining recognition as the preferred method at the expense of Input-Output (I-O) methods.  CGE values are likely to be substantially less than I-O values for the same event.  Occupation-based modelling is becoming increasingly popular way of measuring event-related, economic benefits because the technique estimates the event-attributable increased (or decreased) wage in the host community.

  • There is difficulty in applying the results of one economic impact/benefit assessment to other locations.  Economic impacts are maximised when  government, event organisers and the private sector interact effectively.

  • Sporting events have the potential to build the brand of their host destination, but they must be strategically incorporated into a destination's overall marketing plan.  Given the mediated nature of these events, destination marketers need to consider carefully how their destination is being projected in the telecasts.

Socio-cultural impacts

  • There is a need for more research into the social value of events and how host communities can leverage these events.

  • Community support is essential for a successful large-scale event.

  • Residents will be supportive and responsive to the event if they perceive that they will receive some sort of social, economic, or other kind of benefit the event.  Host community residents value the tourism spending, media coverage, business development opportunities and employment opportunities made possible by events.  Increased community pride, cross-cultural exchanges, lifting the profile of the city, making a place more interesting place to live, community self-esteem and a sense of community rank highly in terms of the positive social outcome of events.

  • Longitudinal studies show that residents tend to expect higher levels of negative impacts from an event than they actually experience.  Residents tend to show increased levels of enthusiasm during the event, than they would  have expected prior to the event.

  • Opposition will be greatest from those who live in closest proximity to the event/facility and from those who have little or no interest in the event.  Noise levels, traffic congestion, overcrowding, and disruption to lifestyle are among the most highly cited negative outcomes of events for local residents.
  • Communities are increasingly aware of 'being used' by political and business elites who profit at the expense of local residents.  Communities are seeking to ensure that individuals and groups receive a just share of the benefits.

  • There is little evidence that crime increases during an event although it places pressure on police to respond effectively given the extra demands of the event.

  • There is little likelihood that major event volunteers will increase their level of volunteerism in the wider community.

Participation and health impacts

  • There is evidence that public health monitoring systems can be developed to ensure food and water quality standards are maintained during a mega-event.  This is not to say that public health issues are not created by events, merely that they can be managed.

  • Despite the intuitive link, there is no compelling evidence that events lead to increased physical activity or sport participation within a host community.  Increased awareness levels and intentions can result, but these may not lead to actual changes in behaviour.

  • There is difficulty in measuring the link between mega-events and mass sport participation, with a need for more research.

  • Physical activity and sports participation is likely to remain unaffected unless the event is embedded in a longer-term developmental strategy.  Sport organisations are often unprepared to capitalise on the opportunities provided by events.

Methodology

Literature review

Source of reference

New Zealand Tourism Research Institute (2007) The benefits of events: an annotated bibliography, AUT University

Web reference

www.nztri.org

The economic impact of four local swimming events (UK, 2006)

Authors

Wilson, R.

Date

2006

Keywords

Sports events; economic impact.

Country of research

United Kingdom

Summary of findings

This article reports on a study of the economic impact of four local swimming events to illustrate the potential of such events to generate economic benefit to the host communities providing that secondary spending opportunities are available.

The article provides a broad overview of previous research on the economic impact of mostly large scale events, particularly in the UK and notes the absence of robust research information on small events.  To fill this gap the author undertook economic impact studies of four regional/local swimming events in Sheffield, Millfield, Middlesbrough and Macclesfield.  The author used the same methodology as that used by the Leisure Industries Research Unit in its work for UK Sport.  Self-completion questionnaires were distributed to competitors, spectators, volunteers/officials and the media at all four events.

The additional expenditure associated with the four events was £84,626 – ranging from £58,875 to £3,644.  The majority of this expenditure in each case was attributed to spectators – from 74% to 54% – with food and drink accounting for an average of 42% of the expenditure.  Accommodation accounted for 25% of spectator expenditure, with spectators (mostly friends or relatives of competitors) staying in commercial accommodation being the highest spenders.  Approximately 75% were day visitors and 25% stayed in commercial accommodation for 1.5 nights.  The majority of volunteers/officials lived locally and did not make a meaningful contribution to the additional expenditure.  Most competitors were day visitors and those staying in commercial accommodation made up the majority of the economic impact from this group, although this varied between each event.  They also spent on food and drink.  The author provides a detailed analysis of the differences between the four events in terms of locations, competitors and spectators to identify the key issues underpinning the differing levels of economic activity.

The author argues that the four event typology developed by LIRC is limited and requires the addition of a fifth category: minor competitor/spectator events, generating limited economic activity, no media interest and part of an annual domestic cycle of sport events (local and regional events in most sports).  For these events to maximise income it is essential that the Infrastructure in the host community and at the facility are located in a good position to maximise the economic activity and that there is provision of secondary expenditure opportunities (vending machines, cafes, special catering facilities, swim shops).  Such events are feasible for many towns and cities and can, with appropriate planning have a positive economic impact.

Methodology

Economic impact analysis; case studies.

Source of reference

Managing Leisure, 11 (1), 57-70

Web reference

http://www.tandf.co.uk/journals/routledge/13606719.html

A model for assessing the economic impact of sports (UK, 2005)

Authors

Gibson, H; McIntyre, S; MacKay, S and Riddington, G.

Date

2005

Keywords

Economic impact; sports events.

Country of research

United Kingdom

Summary of findings

This research note outlines the construction of a detailed regional economic accounting model and describes its application to assess the economic impact of sporting activities, sports events and sport tourism in the regions and localities of the United Kingdom.

The authors suggest that recent developments in assessing the economic impact of sport have clarified how to measure the additional direct economic impact of an activity or event in terms of associated expenditure. 

The DREAM model builds on this previous best practice, adding and re-presenting information important to key stakeholders.  In addition it identifies the indirect impact flowing from the supply chain in a way calibrated to the particular pattern of spending and location of the event. 

Consequently, the authors claim that the model meets the needs of participants and promoters in providing a credible, complete impact assessment of an event. 

The model traces the geography of the event and the supply chain from the local area through neighbouring areas to the regional, national and global level.  It accounts for the supply chain in each region and locality not only in terms of sales and purchases, but also in terms of gross value added, incomes and jobs.  Its treatment of employment identifies full time and part time work, split by gender, skill level and age. 

In addition to these direct and indirect effects the model also appraises induced effects, which arise when the incomes earned in the supply chain are spent, and that spending ripples through the local and wider economies. 

By taking account of the different structures of local economies, the model claims to address some of the social and economic concerns of sports and charitable organisations and national, regional and local public bodies.

Methodology

Economic impact analysis.

Source of reference

European Sport Management Quarterly, 5(3), 321-332

Web reference

http://www.tandf.co.uk/journals/resm

The economic benefits of mass sports events (UK, 2010)

Authors

Coleman, R and Ramchandani, G

Date

2010

Keywords

Sports events; mass participation, cities.

Country of research

United Kingdom

Summary of findings

This article provides a review of evidence relating to the positive economic impacts of non-elite mass participation sporting events, whose primary focus is to promote participation and engagement.  The paper focuses primarily on marathons and other non-elite mass participation events.  A key factor is that such events do not place excessive financial burdens on public funds but can raise place recognition and generate tourist income.

The paper produces data for the financial impact of 15 marathons in the USA and Canada.  For example, it is claimed that in 2000 the New York City Marathon resulted in additional direct expenditure of $51.8 million or $88.1 million including induced expenditure using an income multiplier of 1.7.  Others claim that the place marketing effects lead to off-peak tourism visits thereby limiting the effects of seasonality.  The tourism impacts are illustrated by the fact that, of 32,000 runners in the Honolulu Marathon, 25,000 were from outside Hawaii.  The popularity of such events is confirmed by the fact that there were at least 20 inaugural events in the USA each year between 2002 and 2006.  In the USA participants and visitors are typically affluent and on average participants stay for three days, are accompanied by two non-runners and spend about $271 per day.  Some combine the marathon with music concerts, as in San Diego and Nashville.

The authors warn that many of the USA data are not available for close scrutiny and are often not comparable.  They argue that some of the UK data is more robust as they use direct economic impact by calculating the additional expenditure by visitors and organisers in the host economies.  The article reports that the 2000 London Marathon produced an increase in the London economy of about £25 million and 115,000 bed nights.  The 2001 Bristol half marathon generated £0.6 million additional spending and 3,084 additional bed nights.

The authors compare the economics of non-elite mass-participation events with elite events, using data from 14 events to indicate that the London marathon is easily the most lucrative in terms of absolute economic impact and impact per day.  The authors argue that the well-known displacement effects associated with elite events (in which normal tourists avoid the destination) are much less for mass participation events.  Further, such events can be self-financing, as participants are prepared to pay, can attract sponsorship, have limited or no infrastructural development costs and can attract large numbers of (free) volunteers.

The authors also provide financial information for other non-elite, but non-participation, events which suggest that, where relevant infrastructure exists, events can make a significant economic impact.

Methodology

Literature review

Source of reference

International Journal of Sports Marketing and Sponsorship, 12(1),

Web reference

http://www.imrpublications.com/journal-landing.aspx?volno=L&no=L

Estimating the value of national sporting success (Germany, 2012)

Authors

Wicker, P; Prinz, J and von Hanau, T

Date

2012

Keywords

Sports events; public good; willingness-to-pay.

Country of research

Germany

Summary of findings

This German study, based on a survey of 3049 respondents, used a contingent valuation method (CVM) / stated willingness to pay (WTP) approach to assess the perceived value of winning the 2010 Football World Cup and to identify the components of WTP.  The article provides a literature review of research using the CVM/WTP method to assess the value of non-market public goods such as sporting success.  It explores the issue of the possibility of hypothetical bias and the associated over-estimate of WTP.  It outlines a range of sports research that has used this method including the willingness to pay for major league sports teams in the USA and associated stadium development; nature sports areas; improvements to public sport and recreation programmes; major sports events; national sporting success.

The authors outline a theoretical model based on the theory of consumption capital in which such capital is generated though the repetitive consumption of similar goods.  In this case via the increased consumption of sport spectators generate consumption capital which in turn is related to an individual's utility and will influence their WTP.  This is more likely to be increased if they also participate in the sport and strongly identify with certain teams.  Finally, socio-demographic factors - age/sex/education - may be major mediating factors.

A convenience sample of 3049 16 plus respondents was undertaken using a self-completion questionnaire based on the theory of consumption capital.  Half the respondents stated a WTP for a victory of the German national team at the 2010 World Cup.  The authors state that on the basis of previous research a hypothetical bias was unlikely.  The results indicate that several factors had an impact on WTP.  Young respondents, with a high interest in football, high identification with the country and the national team and who regarded a good result as both nationally and personally important signed a WTP.  The WTP of regular participants is higher than non-participants; there was no gender-related effect; the positive contribution of income is in line with previous studies.

The authors suggest some possible limitations:  sporting success may be more important in Germany than other countries; the study is cross-sectional; the sample is a convenience sample.  Nevertheless the authors conclude that as the study illustrates that consumption capital significantly influences the value of national sporting success it is important that as many sports as possible are televised. Finally they argue that the social effects of sporting investments need to be adequately integrated into any cost-benefit analysis via the use of CVM.

Methodology

Contingent valuation method (CVM)

Source of reference

Sport Management Review, 15(2), 200-210

Web reference

http://www.sciencedirect.com/science/article/pii/S1441352311000623