Sport Event Economic Impact Analysis

Because economic impact measures new money brought into a region, not money that simply circulates within it. A local resident who buys a ticket would, in most cases, have spent that money somewhere in the same regional economy anyway — on a restaurant, a movie, or other entertainment. Counting it as event impact double-counts activity that would have occurred regardless. Crompton identifies the inclusion of local spending as one of the most common and consequential errors inflating sport event impact estimates.

A sales (or output) multiplier captures total transaction value generated as spending recirculates, while an income multiplier captures only the household earnings created. Because each dollar of sales contains intermediate purchases and non-wage costs, the sales multiplier is much larger. Crompton argues that for assessing the benefit to local residents the income multiplier is appropriate, because what matters to a community is the additional earnings its households receive, not gross turnover. Using the sales multiplier is a standard way impact figures are inflated.

Time-switchers are visitors who would have come to the region anyway but rescheduled their trip to coincide with the event; casuals are visitors who were already in the area for another reason and incidentally attended. In neither case did the event cause the visit, so their spending is not new activity attributable to the event. Including them, as many studies do, overstates the injection. A credible analysis surveys attendees about their motivation specifically to identify and exclude these groups.