Hi 

Major events - from arts festivals to sporting spectaculars - all have impacts beyond bums on seats. They create broader economic, social and cultural impact on the cities and towns that host them. Identifying the extent of that impact is a critical role of market and social research, collecting data and conducting critical analysis to allow funding partners, key stakeholders and the community to best understand the value of such events.

Professor Barry Burgan, Deputy Dean at Bond University, is a leading authority on measuring the impact of majors events. He provides some insight into where the impact from events comes from, and how to measure it, economically, culturally and beyond.

Read on square holes.com/blog

Economic impact  relates (usually) to the short term impact on jobs and incomes. Clearly cultural and sporting events have a much broader contribution than this — they  impact on general health and well-being, on creativity, and regional brand and image etc. Studies (and the literature) have focused on economic impact, but there is general agreement that the other  aspects are in many cases of more interest. Economic impact is an important part, but only a part, of the evaluation in events that have tourism attraction as a major objective.

Economic activity is a measure of the aggregate size of an event and associated expenditures — the total that people who attend, spend on tickets, on merchandise, on food and beverages (in and outside the event). The source of data for evaluations is data on the characteristics of the event (attendance, tickets by postcode, financials) and surveys of attendees (including questions such as where they came from, whether as visitors they came for the event, extended their stay, how much they spent and on what). This is of course subject to some sample variation.

Economic impact is the estimate of new or created contribution to income (not expenditure) and jobs in the region under consideration. This firstly allows for transfer affects and assumes for example that local attendees would mainly spend their money on some other local activity if the event was not held, that some visitors who attend the event would have come to the region anyway, that government funding provided would have been spent on other activities — and as such these expenditures are transferred rather than new or created.

The economic impact is made of direct impacts (the incomes and jobs created in servicing the needs of those attending the event based on the new expenditure) and the induced impact (after allowing for flow on or what are sometimes called multiplier effects).

There remains some debate in the literature (and some misunderstanding in practice) about the appropriate models to be used for assessing economic impact. Some event evaluations stop at estimating created expenditure — but of course not all expenditure is equal in the way it impacts on the region. Interestingly the way it seems to be going is that this is more used for smaller and/or regional events — yet it is in those cases that a lot of the expenditure actually does not result in outcomes in the region (because it is spent on imported food and drink, or external artists etc).

The majority of event analyses use Input-Output models to estimate both the direct and induced impacts. Such models are economy wide models giving underling industry ratios (income and jobs to expenditure ) to allow calculation of direct effects and industry linkages which can be used to estimate the induced or flow on effects. The use of IO models has been cautioned in both the literature and in some audits as overstating the outcomes. Early in the debate, this criticism was based on the use of incorrect and overstating multipliers and was valid.

The actual outcomes depend on the nature of the expenditure and the size of the region. The smaller the region, the lower the induced impact as there is more leakage to imports. So, it is important to use a model for the region and not apply broader level (especially national) multipliers — which is a common mistake.

Read / share via square holes.com/blog for the full article, bibliography and associated links

So all of this detail is about the technical aspects of economic impact modelling.  My conclusion is that the economic impact is a valid consideration in the evaluation of outcomes of an event, but is only one aspect. Increasingly we are focusing in our research on understanding the broader benefits and costs in a benefit-cost perspective. This includes longer term economic impacts and social well-being outcomes.

...

Thank you Barry.

And, thank you for reading.

Cheers

Square Holes

Check out the below video about an augmented reality app developed for the upcoming Hybrid World Adelaide July 20-24 in #Adelaide. Square Holes is proud to again be working with Hybrid World Adelaide and Professor Burgan on attendee research and economic impact measurement, as we are also doing (and have been doing for a decade) for the also upcoming Adelaide Film Festival (and other sports, arts and cultural events and festivals).