Modeling Resident Spending Behavior During Sport Events: Do Residents Contribute to Economic Impact?

Abstract

Economic impact studies are the currency of event organizers tasked with justifying public funding. Yet, in the calculation of economic impact, we do not know if residents, as a whole, are a benefit, cost, or neutral party. Building on previous theory we develop a comprehensive model including 72 possible behaviors of residents based on changes in (a) spending, (b) multiplier, (c) timing of expenditures, and (d) geographic location of spending. Applying the model to Super Bowl 50 indicated that few residents were affected, positive and negative effects were relatively equivalent, and overall impact was negligible. This leaves practitioners the option to engage in the challenging process of gathering data on all four variables on all residents or to revert back to the old model of entirely excluding residents from economic impact. From a theoretical perspective, there is a pressing need to properly conceptualize the time variable in economic impact studies.