Question

2) What are economic impact studies used for in the sport industry?

Answer 1

Mega sports events like FIFA, Olympics are bid by cities or countries for hosting. These cities or countries bid as they see these sports events as an opportunity for the economic growth and development. These sports events help in increasing the visibility of the host country on the world map which has a straight impact on the country's economy.

In the sports industry, economic impact studies are taken up to evaluate whether the country or city should bid for the sports event. The purpose of these studies is to provide local committee with the arguments regarding feasibility of project - good or bad to the taxpayers. Economic Impact studies are based on a simple principle that when such big sports events take place in country, there is an increased demand for goods and services. The increased spending occurs due to visitors visiting the country during the mega event. This event helps in increasing visitor spending, job opportunities, tax, etc. Although there are several benefits of hosting a sport event, it is relatively difficult to measure these benefits. Economic Impact studies have faced the criticism around its appropriateness in measuring the benefit. These studies appear to be more perceptive as it deals in subjective aspects.