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Testing the accuracy of event economic impact forecasts

Testing the accuracy of event economic impact forecasts Purpose – The purpose of this paper is to examine the findings from ex ante and ex post economic impact appraisals of six major sports events. The ultimate aim of the paper is to identify the factors that cause differences between forecasts of direct expenditure and figures based on primary research. Design/methodology/approach – A direct expenditure forecast for each event was derived based on analysis of event documentation and informed assumptions applied from previous studies. Subsequently, a comprehensive study was undertaken involving primary data collection and associated desk research. Findings – Of the forecasts, three were inflated and three were conservative relative to the ex post figures. In total, two potential sources of variance are examined – visitor spending and organisational expenditure. The former was found to be more unpredictable when compiling a pre‐event forecast. The group for which direct expenditure is most difficult to predict is spectators, with the most exaggerated forecasts associated with free‐to‐view events. Research limitations/implications – Neither input‐output nor computable general equilibrium models were used to analyse secondary, indirect or induced impacts. Nonetheless, direct expenditure is the basis for modelling wider impacts and is therefore worthy of consideration in its own right. Practical implications – The paper's findings should enable public sector agencies to better understand the reliability of projected figures presented to them by organisers in exchange for securing financial support for their events. Originality/value – Economic impact forecasts are rarely subjected to post‐event scrutiny. This research bridges the gap between ex ante and ex post figures and identifies areas where forecast accuracy can be improved. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Event and Festival Management Emerald Publishing

Testing the accuracy of event economic impact forecasts

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Publisher
Emerald Publishing
Copyright
Copyright © 2012 Emerald Group Publishing Limited. All rights reserved.
ISSN
1758-2954
DOI
10.1108/17582951211229726
Publisher site
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Abstract

Purpose – The purpose of this paper is to examine the findings from ex ante and ex post economic impact appraisals of six major sports events. The ultimate aim of the paper is to identify the factors that cause differences between forecasts of direct expenditure and figures based on primary research. Design/methodology/approach – A direct expenditure forecast for each event was derived based on analysis of event documentation and informed assumptions applied from previous studies. Subsequently, a comprehensive study was undertaken involving primary data collection and associated desk research. Findings – Of the forecasts, three were inflated and three were conservative relative to the ex post figures. In total, two potential sources of variance are examined – visitor spending and organisational expenditure. The former was found to be more unpredictable when compiling a pre‐event forecast. The group for which direct expenditure is most difficult to predict is spectators, with the most exaggerated forecasts associated with free‐to‐view events. Research limitations/implications – Neither input‐output nor computable general equilibrium models were used to analyse secondary, indirect or induced impacts. Nonetheless, direct expenditure is the basis for modelling wider impacts and is therefore worthy of consideration in its own right. Practical implications – The paper's findings should enable public sector agencies to better understand the reliability of projected figures presented to them by organisers in exchange for securing financial support for their events. Originality/value – Economic impact forecasts are rarely subjected to post‐event scrutiny. This research bridges the gap between ex ante and ex post figures and identifies areas where forecast accuracy can be improved.

Journal

International Journal of Event and Festival Management – Emerald Publishing

Published: Jun 1, 2012

Keywords: United Kingdom; Recession; Sporting events; Expenditure; Financial forecasting; Challenges; Innovation; Creativity; Stakeholders; Consultation

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