Simple economic frameworks to evaluate public investments in sporting events in regional Australia

Abstract

Increasingly communities and government are using sporting, recreation and festival events as drivers of economic growth in regional areas, particularly where these can be used to align with tourism activities. However a key challenge is to evaluate and prioritise investments in facilities and services for these types of events. It is difficult for local government and communities to identify exactly which opportunities to pursue, because of issues such as the large costs involved in providing infrastructure, maintaining facilities and hosting events, competition from other centres, the variety of sport and recreation possibilities, and the variation in potential market segments. In this paper we develop a framework to evaluate proposals as well as provide a simple assessment tool to help prioritise between options. A case study application to a regional city in Queensland, Australia, demonstrates that the majority of economic benefits from a sporting event can be estimated as the number of extra visitor nights generated by $45 per visitor night. For this case study, these benefits should be at least equal or greater than any investment of public funds.