Economic impact analysis versus cost benefit analysis: The case of a medium-sized sport event

Marijke Taks, Stefan Kesenne, Laurence Chalip, Beverly Christine Green, Scott Martyn

Research output: Contribution to journalArticlepeer-review

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.

Original languageEnglish (US)
Pages (from-to)187-203
Number of pages17
JournalInternational Journal of Sport Finance
Volume6
Issue number3
StatePublished - Aug 1 2011

Keywords

  • Cost-benefit analysis
  • Economic impact analysis
  • Event attendees
  • Expenditures
  • Local residents
  • Spectators
  • Sport event visitors

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Marketing

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