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Economic Impact Analysis versus Cost Benefit Analysis: The Case of a Medium-Sized Sport Event

Author

Listed:
  • Marijke Taks

    (University of Windsor)

  • Stefan Kesenne

    (Katholieke Universiteit)

  • Laurence Chalip

    (University of Texas)

  • Christine Green

    (University of Texas)

  • Scott Martyn

    (University of Windsor)

Abstract

This paper empirically illustrates the difference between a standard economic impact analysis (EIA) and a cost-benefit analysis (CBA). The EIA was conducted using an existing (input-output) I-O model (STEAM). The benefit side of the CBA included non-local visitor spending, the revenue of the local organizing committee (LOC), the consumer surplus, and public good value of the sport event for the local residents. The cost side of the CBA was estimated based on the opportunity costs related to the construction of the stadium (including labor costs and the cost of borrowing), imports, and ticket sales to locals. The EIA indicated that the 2005 Pan-American Junior Athletic Championships generated a net increase in economic activity in the city of $5.6 million. The CBA showed a negative net benefit of $2.4 million. Both methods presented challenges and limitations, but CBA has the distinct advantage that it identifies the net benefits associated with hosting a sport event.

Suggested Citation

  • Marijke Taks & Stefan Kesenne & Laurence Chalip & Christine Green & Scott Martyn, 2011. "Economic Impact Analysis versus Cost Benefit Analysis: The Case of a Medium-Sized Sport Event," International Journal of Sport Finance, Fitness Information Technology, vol. 6(3), pages 187-203, August.
    • Handle: RePEc:jsf:intjsf:v:6:y:2011:i:3:p:187-203
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    More about this item

    Keywords

    cost-benefit analysis; economic impact analysis; event attendees; expenditures; local residents; spectators; sport event visitors;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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