Economic Impact Analysis - "Hallmark" Events 
Methodology  -  Lake State Examples - Other Examples         
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Methodology:

Jackson, J., M. Houghton, R. Russell and P. Triandos. 2005. "Innovations in Measuring Economic Impacts of Regional Festivals: A Do-It-Yourself Kit." Journal of Travel Research 43(May):360-367.

This paper describes an economic impact analysis Do-It-Yourself kit that was put together to measure the regional economic impact of small to medium sized festivals. The kit is designed to be used with readily accessible software and is based on input-output analysis. Manuals and a web-page supporting the kit have also been developed. The kit was distributed to festival organizers and training session were organized in a variety of locales. The authors have the kit reported receiving more than 100 requests for copies of the kit. Preliminary results from seven case studies are reported and demonstrate the potential usefulness of standardizing data collection of this type of economic impact analysis data at different festivals within a region or State.

Crompton, J. L., L. Seokho and T. J. Shuster. 2001. "A Guide for Undertaking Economic Impact Studies: The Springfest Example." Journal of Travel Research 40(August):79-87.

This study, like of Tyrell and Johnston (2001), proposes a framework for analyzing the impact of major events on a local economy. This framework is somewhat simpler thus requiring fewer data inputs. In this proposed framework, local residents are not considered thus preventing an analysis of whether local dollars are being lost (purchases made to non-local sources - e.g. vendors - that wouldn't have been made otherwise) or gained (purchases that are being made that have a local benefit that may not have been made locally otherwise). Visitor motivations are characterized by the concepts of "time-switchers" (visitors who would have come to town at another time of year) and "casuals" (visitors who were already coming to town and decided to attend the event). The authors emphasize the importance of using income rather than sales as the appropriate measuring stick. They conclude with the example of a tourism impact study that abused the four central principles cited in this paper: inclusion of local residents; inclusion of time-switchers and casuals; use of sales output as the measuring stick; and implying that full-time jobs result necessarily from visitors' expenditures. When breaking these rules the resulting estimated economic impact of one study changed from $16 million to $321 million.

Tyrrell, T. J. and R. J. Johnston. 2001. "A Framework for Assessing Direct Economic Impacts of Tourist Events: Distinguishing Origins, Destinations and Causes of Expenditures." Journal of Travel Research 40(August):94-100.

This study presents a framework (see also Crompton, Lee and Shuster [2001]) for assessing the economic impact of major events to a local or regional economy. A strong distinction is made between gross versus net impacts. To accurately calculate net impacts researchers need to take into account the following factors: 1) Are the goods and services being purchased at the event by local residents? (e.g. would these purchases have been made anyway without the event) 2) Are the goods or services being purchased from a local source? (e.g. are there loses or gains to the local economy) 3) Is the reason for the purchase was the event (e.g. I came because I love this musician) or the site? (e.g. I love coming to this town and discovered this musician was playing). The authors emphasis that all aspects of the event must be considered including the spectators, the players/competitors, the media or umpires, the host and major sponsors and exhibitors or vendors. Non-monetary contributions - such as in-kind donotions or volunteer time - can also be consider. Using an example from Rhode Island the authors conclude that without an adoption of their proposed framework there is a strong possibility of overestimate the economic impact of events on the local or regional economy.

Crompton, J. L. 1999. Measuring the Economic Impact of Visitors to Sports Tournaments and Special Events. Ashburn, National Recreation and Park Association. Web Link.

This book deals with the general subject of economic impact analysis, but in particular sports tournaments and festival and spectator events. The book reviews the subject of economic impact analysis and pays particular attention to some of the pitfalls that the economic impact literature can fall into and illustrates the erroneous results that can result. It discusses appropriate methods of data collection and analysis, and reviews the results of 30 economic impact studies.

McHone, W. W. and B. Rungeling. 2000. "Practical Issues in Measuring the Impact of a Cultural Tourist Event in a Major Destination." Journal of Travel Research 38(February):299-302.

This paper uses the example of the challenge of estimating the economic impacts of visitors to the Imperial Tombs of China (ITC) exhibition on Orlando Florida. There are many other attractions that might draw tourists to Orlando so careful determination of visitor attendance reasoning is required. In particular the following issues were carefully considered: 1) were local residents attracted to the event and spending dollars locally that they would have spent elsewhere - the authors concluded no 2) for visitors not attracted solely by the ITC did they increase the length of their stay because of the event 3) did attendance at the ITC mean a substitution for spending elsewhere. Only once all these factors were considered could the resulting data be entered into a input-output model.

Mules, T. 1998. "Taxpayer Subsidies for Major Sporting Events." Sport Management Review 1:25-43.

This paper presents a literature review the research on taxpayer subsidies of large events, or "hallmark" events, such as sporting events. The various components of evaluating whether such taxpayer subsidies are appropriate are presented in turn. The literature reviewed includes: the economic impact of the event (only expenditures that would not have occurred otherwise should be evaluated); the importance of scale and the viewpoint of the analysis (are the costs and benefits being considered at the national or local scale?); does the region or locality accrue any lasting promotional benefit; how are the economic benefits distributed amongst different segments of society; are the taxpayer contributions offset fully by tax revenue; different ways to evaluate or rationalize government assistance; and an examination of the impact of spectator vs participatory sporting events. The literature review demonstrates that most of large sporting events run at a loss and that rarely do taxpayer revenues offset taxpayer contributions. Where the taxpayer subsidy largely benefits the tourism industry, the industry should be encouraged to meet the cost. Where the tourism industry does not contribute, the author finds it difficult to avoid the conclusion that the taxpayer is generally the loser in hosting of major sporting events.

Burgan, B. and T. Mules. 1992. "Economic Impacts of Sporting Events." Annals of Tourism Research 19(4):700-710.

This paper examines the difficulties involved in measuring the economic impacts of major sporting events on their host regions. Since such economic impacts relate mainly to expenditure associated with tourists who are attracted by the event, care is needed in measuring the amount of expenditure that would not have occurred in the absence of the event. Visitor surveys can be used to identify those tourists who merely switched the time of their visit in order to coincide with the event. A more daunting task is the identification of public expenditure on facilities that is new, that is, not switched from other income-generating activities such as construction of public infrastructure or the provision of services. In general, the approach is that of all expenditures involved in an event, only that which is funded by sources outside the region can be treated as new expenditure, attributable to the event.

Ritchie, J. R. B. 1984. "Assessing the Impact of Hallmark Events: Conceptual and Research Issues." Journal of Travel Research 23(Summer):2-11.

This article situates the economic impact analysis of "hallmark events" or large events such as festivals, concerts or sports festivals in a broader research context. Hallmark events are classified as potentially having economic, tourism/commercial, sociocultural, psychological and political impacts. The body of hallmark event literature deals most effectively with economic impacts.

Lake States Examples:

Cottingham, J., H. Moyer, T. Roper, M. Venkateswaran and R. Parish. 1996. Analysis of Agricultural Festivals In Wisconsin: Organization, Management Practices, and Social and Economic Impacts. Madison, WI: University of Wisconsin-Extension.

This study looked at agricultural festivals in Wisconsin, particularly the Strawberry festival in Cedarburg, to understand the visitor profile and their expenditure habits. In addition, the study looked at how local business owners viewed the festival and how the festival could be improved. Finally ten festival directors were surveyed to understand how successful festivals are operated. Expenditures of visitors averaged $90 for day-trippers and $200 for overnight guests. This study failed to take the step to measure economic impacts, although it was a specific objective of the study.

Marcouiller, D. W., S. Hamilton and C. Jobe. 1995. Farm Progress Days 1994: Economic and Educational Impacts. Madison, WI: Tourism Research and Resources Center, University of Wisconsin-Extension.

This study used face-to-face interviews of visitors and an input-output model (constructed using MicroIMPLAN) to assess the economic impacts of the 1994 Farm Progress Days held in Columbia County, Wisconsin. This annual agricultural technology transfer event has long been an important connecting point for agricultural producers, agribusiness interests, and Cooperative Extension specialists. In addition to expenditure patterns, the survey collected information useful to planning future Farm Progress Days events.

Moyer, H., M. Venkateswaran, J. Cottingham, T. Roper and R. Tigner. 1995. Agricultural Festivals: Analysis of Selected Impacts on the Producers and the Communities. Madison, WI: University of Wisconsin-Extension.

Surveys were conducted of visitors to the festivals, local businesses, and orchard owners. The results are described in the report. Although expenditure data was gathered and local businesses reported increased activity, this data was not translated into direct and indirect benefits in terms of income or jobs.

Norman, W. C., S. Hamilton and D. W. Marcouiller. 1994. A Profile of Visitors to the 1993 Experimental Aircraft Association Convention. Madison, WI: Tourism Research and Resources Center, University of Wisconsin-Extension.

Visitors to the 1993 Experimental Aircraft Association Convention were personally surveyed in order to develop a profile, measure visitor expenditures, and determine the economic impact. The report provided a visitor profile, trip characteristics, trip satisfaction, trip motives and activities, visitor expenditures and economic impact analysis. Using input-output analysis, total gross output increased by $83,041,400 as a result of the convention. In addition, more than 2,500 jobs were created.

Norman, W. C., D. W. Marcouiller and S. Hamilton. 1994. A Profile of Visitors to the 1994 Dane County Fair. Madison, WI: Tourism Research and Resources Center, University of Wisconsin-Extension.

This study examined the impact of the Dane County Fair on the local economy. A visitor profile was prepared along with information about trip characteristics, trip motives and area activities, visitor satisfaction, and visitor expenditures and their economic impact. Input-output analysis produced direct, indirect, and induced impacts of nonresident expenditures which increased the total gross output of the Dane County area by $1,873,200. A total of 27 annual full and part-time jobs were created as well.

Hamilton, S., L. Larson, D. Adler, J. Bauer and C. Kellog. 1992. 1992 Wisconsin State Fair Visitor Profile. Madison, WI: Recreation Resources Center, University of Wisconsin-Extension.

A sampling of people (1,457) who attended the State Fair were interviewed to prepare a visitor profile and expenditure pattern. The study estimated that with per person expenditures averaging $25.24, total expenditures amounted to approximately $23.4 million.

Sumathi, N. R. and D. Berard. 1992. Lac Courte Oreilles Honor the Earth Pow-Wow: An Informational and Economic Analysis. Madison, WI: The Center for Community Economic Development, Univeristy of Wisconsin-Extension.

Honor the Earth Pow-Wow dates to 1973 as an annual event of the Lac Courte Oreilles Tribe. Little was known about the economic impact of this event to the area. This report had three objectives: "to assess the economic impacts on Lac Courte Oreilles and the broader surrounding area; to gather information related to participants' interests and activities while attending the Honor the Earth Pow-Wow; and to gather source demographic information on participants for use in future planning, organizing, and promotional efforts." The study found that with 5,000 visitors to the area and average party expenditures totaling $205.37, the economic impact was estimated at $316,328. An conservative local income multiplier of 1.3 was used to measure direct and indirect economic impacts.

Hamilton, S. 1991. Pulling to See Who Was At the 1991 Grand National Tractor Pull. Madison, WI: Recreation Resources Center, University of Wisconsin-Extension.

At the Grand National Tractor Pull and the associated craft and flea markets in Tomah, visitor surveys (1,048) were conducted to prepare a visitor profile and expenditure patterns. The study estimated that average daily expenditures per person were $43.27.

Gray, J. and S. Hamilton. 1990. 1989 Wisconsin Festivals, Inc. Visitor Profile. Madison, WI: Recreation Resources Center, University of Wisconsin-Extension.

Four of seven Craft Festivals were studied to prepare a visitor profile. A survey of visitors was undertaken which included information on expenditure patterns. The study found that craft purchases averaged $108.71 per party with an additional $10 spent on refreshments and another $26 spent in the area.

Gray, J., S. Hamilton, L. Larson and T. Kessenich. 1990. 1990 Wisconsin State Fair Visitor Profile. Madison, WI: Recreation Resources Center, University of Wisconsin-Extension.

This report provides a visitor profile of State Fair patrons and estimates how much these patrons spent in the Milwaukee area, both at the Fair and outside the fairgrounds. The report also estimates use of lodging facilities. Visitors spent about $30 million in the Milwaukee area with $9.5 million spent outside the fairgrounds.

Gray, J., D. Sprehn and S. Hamilton. 1990. 1990 Warrens Cranberry Festival Visitor Profile. Madison, WI: University of Wisconsin-Extension.

This visitor profile was generated from a sampling of people that were interviewed at the festival. Expenditure patterns were evaluated as well. The average dollars spent per day per person was estimated at $32.18.

Gray, J., F. Li and S. Hamilton. 1989. 1989 Wisconsin River Logjam & Kayak Races. Madison, WI: Recreation Resources Center, University of Wisconsin-Extension.

Interviews were conducted of spectator at the Wisconsin River Logjam and Kayak races to prepare a visitor profile and expenditure patterns. Logjam visitors spent an average of $40.82 per party per day in comparison to kayak race visitors who spent $26.39 on average per party per day. It is estimated that a total of $362,206 was spent in the Wausau area during these two events.

Hovland, J., J. Gray and S. Hamilton. 1989. Visitor Profile of the 1989 Fond Du Lac County Fair. Fond du Lac, WI: Fond du Lac County, University of Wisconsin-Extension.

A survey of fair visitors (298) was conducted to provide a visitor profile and to estimate the how much was spent while attending the fair. The study estimated that about $700,000 was spent at the fair.

Gray, J., M. Mistele, S. Hamilton, A. Somersan and T. Kessenich. 1988. 1988 Wisconsin State Fair Visitor Profile. Madison, WI: Recreation Resources Center, University of Wisconsin-Extension.

A sampling of people at the Wisconsin State Fair were interviewed about their spending habits when visiting the fair. It is estimated that total attendance to the State Fair was 834,782. On average, $17.19 per person was spent. A total of $13.5 million was spent by fairgoers with an additional $5.7 million spent outside the fairgrounds.

Gray, J. and S. Hamilton. 1987. Experimental Aircraft Association Convention Survey. Madison, WI: Recreation Resources Center, University of Wisconsin-Extension.

4,427 party interviews were conducted at this 1987 convention in Oshkosh, Wisconsin to develop a visitor profile expenditure data and marketing information on the visitor to the fly-in. Total expenditures in the Oshkosh area was estimated at $47.8 million for all parties during the convention. For the State of Wisconsin, total expenditures amounted to $65 million.

Gray, J., M. Mistele, S. Hamilton and A. Somersan. 1987. 1987 Wisconsin State Fair Visitor Profile. Madison, WI: Recreation Resources Center, University of Wisconsin-Extension.

1,791 fair visitors were interviewed to prepare a visitor profile. Total attendance was estimated at 872,191 people who spent a total of $21.4 million in the Milwaukee area. A total of $15.3 million was spent at the fair with the remaining $6.1 million spent outside the fairgrounds.

Gray, J., J. Higgins and S. Hamilton. 1986. 1986 Wisconsin State Fair Visitor Profile. Madison, WI: Recreation Resources Center, University of Wisconsin-Extension.

A sampling of people (2,100) who attended the State Fair were interviewed to prepare a visitor profile and expenditure pattern. The study found that visitors spent about $23.2 million in the Milwaukee area during the fair with $15.7 million spent at the fair.

Gray, J., S. Hamilton and K. Jensen Mueller. 1985. 1985 Wisconsin State Fair Visitor Profile. Madison, WI: Recreation Resources Center, University of Wisconsin-Extension.

A sampling of people (1,715) who attended the State Fair were interviewed to prepare a visitor profile and expenditure pattern. It was estimated that visitors spent $16.9 million in Milwaukee of which $11 million was spent at the fair.

Gray, J. and K. Jensen. 1985. 1984 Wisconsin State Fair Visitor Profile. Madison, WI: Recreation Resources Center, University of Wisconsin-Extension.

A sampling of people (1,343) who attended the State Fair were interviewed to prepare a visitor profile and expenditure pattern. About $15.6 million was estimated to be spent by visitors to the Milwaukee area of which $9.9 million was spent at the fair.

Gray, J. 1982. 1982 Wisconsin State Fair Visitor Profile. Madison, WI: Recreation Resources Center, University of Wisconsin-Extension.

A sampling of people (1,969) who attended the State Fair were interviewed to prepare a visitor profile and expenditure pattern. The study estimated that $8.9 million was spent at the fair with an additional $6.6 million spent in the Milwaukee area.

Other Examples:

Lee, C.-K. and T. Taylor. 2005. "Critical reflections on the Economic Impact Assessment of a Mega-Event: The Case of 2002 FIFA World Cup." Tourism Management 26(4):595-603.

This paper reports on the economic impact assessment of the 2002 FIFA World Cup in South Korea, using an estimation method that excluded tourists whose travel was non-event related. The survey research conducted during the event established that 57.7% of total tourist arrivals during the period of the event could be classified as either directly and indirectly attracted by the World Cup. Using this data it was calculated that the World Cup generated an economic impact of US$1.35 billion of output (sales), US$307 million of income, and US$713 million of value added for South Korea. The results also showed that foreign World Cup tourists provided a much higher yield compared with foreign leisure tourists, spending an estimated 1.8 times as much. Inclusion of the expenditure by non-World Cup tourists (42.3%) in the calculations of impact would have resulted in a significant overestimation due to the further multiplication of the expanded figures by an input–output model, misleading the net economic impact of the event.

Chhabra, D., E. Sills and F. Cubbage. 2003. "The Significance of Festivals to Rural Economies: Estimating the Economic Impacts of Scottish Highland Games in North Carolina." Journal of Travel Research 41(May):421-427.

This study uses input-output analysis to estimate the economic impact of visitor expenditures at two Scottish festivals in rural North Carolina. While the local restaurants and lodging and festival vendors and sponsors benefit from substantial visitor expenditures, the multipliers are relatively small, and hence the total economic impact of the festivals represent only a small percentage of economic activity in the two regions considered. Lodging expenditures have the greatest impact on the region with a single-day festival, while expenditures on food and beverage have the greatest impact on the region with a single-day festival. The magnitude of the economic impact depends on the characteristics of both the festival (number of days) and the local economy (other attractions and linkages).

Gelen, A. 2003. "Local Economic Impacts: The British Open." Annals of Tourism Research 30(2):406-425.

This paper quantifies the local economic impact of the 1999 British Open golf tournament held in Carnoustie, United Kingdom. It begins with a comprehensive review of the economic impact literature for major or "hallmark" events and establishes a consistent methodological framework. Its approach is consistent with Tyrell and Johnston (2001) and Crompton et. al. (2001). In this study some local impacts are included as about 5% of local spectators indicated they would have gone elsewhere. The adopted framework is also careful to account for any leakages out of the local economy in spectator expenditures. Despite 20.1 million in total expenditures in the local economy the income effect was only 20.8 million. The author attributes this small multiplier effect to a careful and consistent methodology in estimating economic impacts.

Gazel, R. C. and R. K. Schwer. 1997. "Beyond Rock and Roll: The Economic Impact of the Grateful Dead on the Local Economy." Journal of Cultural Economics 21:41-55.

This study uses regional multipliers derived from an input-output model (RIMS II) to analyze the economic impact of Grateful Dead concert goers on the local of economy of Las Vegas. The authors apply a framework of analysis which closely resembles that proposed by Tyrell and Johnston (2001) and Crompton, Seokho and Shuster (2001). Using a variety of survey techniques at the concert, visitor and local residents attendance motivations and spending patterns were sampled. Using this data and multipliers (derived from RIMS II for the local county) total economic impacts are presented. However, this study reports total expenditures impacts rather than income impacts as advocated by Crompton, Seokho and Shuster.

Mitchell, C. J. A. 1993. "Economic Impact of the Arts: Theatre Festivals in Small Ontario Communities." Journal of Cultural Economics 17:55-67.

This study looks at the economic impact of small professional theatre companies (budget of less than 2 million) on nine small communities (population less than 10,000) in southern Ontario. Economic impact is measured in terms of total visitor expenditures. The study also calculates correlation coefficients to investigate the factors that lead to the differences in total economic impact in each of the communities. The study concludes that economic well-being will be maximized by attracting more non-local visitors (more prevalent in communities with established theatre companies) and if the tourist infrastructure to sustain tourists is in place.

Murphy, P. E. and B. A. Carmichael. 1991. "Assessing the Tourism Benefits of an Open Access Sports Tournament: The 1989 B.C. Winter Games." Journal of Travel Research 29(Winter):32-36.

This paper provides an estimate of the expenditures of tourists during an open access (un-ticketed) sporting festival in Nelson British Columbia. This is an attempt to fill a gap in the hallmark events literature, which focuses on important hallmark events in smaller markets. The 4 day event attracted 2,171 participants (includes coaches and officials) and a volunteer effort of 3,800. There was close to 480,000 dollars in expenditures by tourists - participants and spectators - over the 4 day period.

Long, P. T. and R. R. Perdue. 1990. "The Economic Impact of Rural Festivals and Special Events: Assessing the Spatial Distribution of Expenditures." Journal of Travel Research 28(Spring):10-14.

This article provides expenditure estimates for visitors attending the Carbondale Mountain Fair in the small (2,084) town of Carbondale in west-central Colorado. Significantly, this study highlights the importance of determining which expenditures are made in the local market or to local businesses. A total of 74.9% of all visitor expenditures were to entities based outside of the local area. Studies that do not account for non-local spending may severely overestimate the economic impact of festivals to host communities.

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