The art and science of conducting economic impact studies

Abstract

As the awareness and interest in sport tourism as an economic catalyst increases, so do the number of related economic impact studies. These studies have been commissioned by organising bodies as well as supportive governmental and sponsoring officials for differing purposes. Nevertheless, due to the complexity of economic impact research, the broad scope of sport tourism and the involvement of numerous variables, many such previous studies were flawed in design, resulting in fallacious conclusions pertaining to the amount of economic impact brought to a community. The authors of this paper, through reviewing more than 50 economic impact studies, attempted to unveil the art and science of economic impact research, the goal being to help sport tourism managers obtain a better understanding of economic impact research in the light of how to conduct, interpret and evaluate such studies. The scope of an economic impact study; that is, the economic region to be studied, is the first issue that needs to be addressed. Without clearly defining the impact region, it would be impossible to exclude those unqualified visitors and their expenditures from the final estimates of economic impact. The use of multipliers is the next issue to be addressed. A decision must be made as to whether or not a multiplier should be applied and if so, which type to use. The cause and source of economic impact must also be determined prior to the execution of an impact study. As related to sport tourism, a cause is a sport event, facility, or organisation that brings about the activity that impacts the economy of the host community. Another issue discussed pertains to the different methods (survey and non-survery) for collecting data. Visitor spending on lodging, food and beverage, entertainment, transportation and miscellaneous retail are common elements collected through a survey. Construction costs, player salaries, advertising fees, and tax revenues are samples of the sources of impact that need to be dealt with cautiously. Both the survey and non-survey methods have their own merits, shortcomings and circumstances to use. Attribution, accessibility, time delays and appropriateness are four problems associated with secondary data collection that could affect the accuracy of data. The different uses of vocabulary and the selective inclusion of information (tangible vs non-tan gible impacts), are but two issues related to the reporting of economic impact study results. A total of 11 types of expenditure have been identified that are commonly excluded from economic impact studies due to the difficulty in data collection. In conclusion, when evaluating an economic study, one needs to consider the study's relevance, scope, efficiency, accuracy and verification.