A Critical Perspective on Measuring the Economic Impact of Events. Arne Feddersen Associate Professor University of Southern Denmark Campus Esbjerg
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1 A Critical Perspective on Measuring the Economic Impact of Events Arne Feddersen Associate Professor University of Southern Denmark Campus Esbjerg
2 Outline 1 Introduction 2 Academic evidence on event impacts 3 Theoretical / methodological issues 4 Outlook 2
3 About us! Research Group in Sport and Event Management: established in 2008 Reseach fields: Economic effects of sport events and facilities, sport events and tourism, city branding/place banding, sport marketing, anti-doping measures, voluntarism, sports gambling, market analysis, consumer behavior Study programs: B.Sc. in Sport and Event Management (HA), M.Sc. in Sport and Event Management (cand. merc.) Members: Arne Feddersen (Associate Professor), Oliver Schnittka (Associate Professor), Chris Horbel (Associate Professor), Julian Hofmann (Assistant Professor), Christian Jensen (PhD Student), Grzegorz Kwiatkowski (PhD Student) 3
4 About us! Research Group in Sport and Event Management: Arne Feddersen (Professor MSO) Chris Horbel (Associate Professor) Oliver Schnittka (Associate Professor) Ulrik Wagner (Associate Professor) Julian Hofmann (Assistant Professor) H. Thomas R. Persson (Assistant Professor) Grzegorz Kwiatkowski (Postdoc) Rasmus Nissen (Postdoc) Marie Birch Overbye (Postdoc) Kasper Roe Iversen (PhD student) Christian Jensen (PhD Student) 4
5 Basics (I) When talking about event impacts more often than not the first thing that we consider is the economic impact. The projected economic impact can be a major determinant in the decision to proceed with a bid or development of an event. Economic impact studies are often undertaken not to provide an accurate assessment of the impact but rather to legitimize the decision to invest in the event. Economic impact is theoretically based on money flowing into an area from outside the local economy. 5
6 Basics (II) Ex-ante vs. ex-post. Academic vs. consulting. Primary economic impact and secondary economic impact 6
7 Basics (III) Standard approach to measure (forecast) the primary economic impact: The spending patterns of event attendees are sampled, averaged and then upscaled to the overall event population. Methods to calculate the overall economic impact: Multiplier Analysis Cost-Benefit-Analysis Input/output tables Computable General Equilibrium (CGE) models 7
8 8 Conceptual Framework
9 Conceptual Framework Source: Preuss (2005, p. 288). 9
10 Conceptual Framework Source: Preuss (2005, p. 288). 10
11 Event-affected persons Group Attendees origin Regional significance (economic impact) Local Non-local Positive Neutral Negative Residents X X Home Stayers X X Changers X X Runaways X X Event Visitors X X Extensioners X X Casuals X X Time Switchers X X Cancellers X X 11
12 Event-affected persons Group Attendees origin Regional significance (economic impact) Local Non-local Positive Neutral Negative Residents X X Home Stayers X X Changers X X Runaways X X Event Visitors X X Extensioners X X Casuals X X Time Switchers X X Cancellers X X 12
13 Event-affected persons Group Attendees origin Regional significance (economic impact) Local Non-local Positive Neutral Negative Residents X X Home Stayers X X Changers X X Runaways X X Event Visitors X X Extensioners X X Casuals X X Time Switchers X X Cancellers X X 13
14 Event-affected persons Group Attendees origin Regional significance (economic impact) Local Non-local Positive Neutral Negative Residents X X Home Stayers X X Changers X X Runaways X X Event Visitors X X Extensioners X X Casuals * X X Time Switchers X X Cancellers X X 14
15 Event-affected persons Group Attendees origin Regional significance (economic impact) Local Non-local Positive Neutral Negative Residents X X Home Stayers X X Event Visitors X X Extensioners X X Casuals * X X Time Switchers X X 15
16 Identification of sub-groups of event attendees 16
17 Sensitivity of EIA Important (exogenous) information/assumptions: Definition of the impacted area Estimation of the number of attendees Choice of method to calculate the secondary effects (often choice of the multiplier). 17
18 Sensitivity of EIA Giro d Italia 2012 City (Herning/Horsens) Municipality (Kommune) Region (Midtjylland) Country (Denmark) Estimated total attendance 500, , ,000 18
19 Sensitivity of EIA Giro d Italia 2012 Estimated total attendance 500, , ,000 City (Herning/Horsens) 7,114,954 5,336,215 3,557,477 Municipality (Kommune) 6,908,166 5,181,124 3,454,083 Region (Midtjylland) 5,510,174 4,132,630 2,755,087 Country (Denmark) 751, , ,708 19
20 Conclusion & Recommendations Assessing the economic impact of an event is a NON- TRIVIAL task! Please try to be as precise and careful as possible. If possible use more sophisticated methods (i.e. cost-benefitanalysis over multiplier based economic impact analysis). Economic impact assessment should be oriented at your stakeholders ( Who is paying the party? ) Remember: (Tangible) economic impacts are not the only effects of events. 20
21 A Critical Perspective on Measuring the Economic Impact of Events Arne Feddersen Associate Professor University of Southern Denmark Campus Esbjerg
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