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6Q2 TsTaCh and Practice
Journal Bulletin of Stavropol Region
UDK 332.1(492)
Jan Willem, Bart Goedknegt, Wim Heijman
REGIONAL ECONOMIC IMPACT OF AN EVENT: THE CASE OF THE ROTTERDAM MARATHON
Abstract
The Rotterdam Marathon is an annual sports event in Rotterdam. This biggest one-day event in the Netherlands attracted around 925,000 visitors in 2014. This paper aims at evaluating its regional economic impact
Jan Willem -
Wageningen University, the Netherlands
Bart Goedknegt -
Wageningen University, the Netherlands
by way of input output analysis in terms of number of jobs.
Key words: Rotterdam Marathon, Event evaluation, Regional development, Input-output analysis.
Heijman Wim -
Professor, Department of Social Sciences, Wageningen University, the Netherland
1. Introduction
The Rotterdam Marathon is an annual event in the city centre of Rotterdam. In this paper we aim at the computation of its economic impact on the municipality of Rotterdam in terms of employment.
Events can impact the local economy. Economic impact is described by Crompton (2006) as: «The net economic change in the incomes of host residents that results from spending attributed to tourist» (Crompton, 2006: p. 67). Events are frequently used as booster for regional economic development (Heijman et al, 2011).
The most important reason to host an event is to create a touristic attraction. The importance of evaluating the impact of events may be necessary because «producing an economic impact study to demonstrate that economic returns to a community will exceed its investment has become almost a requirement for event organizers». (Crompton, 1995: p. 33)
Foreign investments, exports, increasing infrastructure are some examples of economic returns to a community which are generated by an event. Moreover many tourists arrive at the airport or train station, they stay in hotels, they use public transportation, and they enjoy the city by night.
The annual Rotterdam Marathon is a major event with close to a million visitors. Economic assessments of events like this is important for decision making by the local authorities. In this case we aim to evaluate the impact of the Marathon on the economy of the Municipality of Rotterdam.
2. Method
Input-output analysis (IOA)is the basis for this analysis. With the use of IOA, interdependencies between different sectors within an economy can be measured. The input-output table is an important feature of the IOA. It shows the intra - and inter-sector flows of goods and services between sectors of an economy given a certain time frame (Leontief, 1986).
A regional IOA is required to evaluate the impact of the event. Because, for Rotterdam, no regional IOT existed the national (Dutch) IOT needed to be regionalized. This was done with the help of location quotients.Two methods were applied: the simple location quotient (SLQ) and the location quotient of Flegg and Webber (1997, 2000): (FLQ). The SLQ has been said to overestimate the impact on the regional economy (Flegget al.,2013), where the FLQ is the method resulting in the lowest regional impact (Steijart, 2013). By computing the impact according to these location quotients we get a good impression of the possible variation in outcomes.
After the construction of the regional IOT the analysis could be carried out with the help of the Leontief Equation (Heijman et al.,2010):
AX = (I - A)-1AF.
X Output Vector; A Matrix of technical coefficients; F Final Demand Vector; I identity matrix.
3. Data
The most recent Dutch national input-output table of 2012 was used. The five most relevant sectors were chosen in which the impact of the event seemed most likely. A sixth 'sector' (sector F) was created to combine all other sectors of the input-output table.
The questionnaire is an important aspect of the research to obtain the primary data (Adler et al. 2011; Kramer et al., 2014). During the marathon in 2014, interviews were conducted amongst the spectators along the course. The survey was carried out at random places in the city centre of Rotterdam by two different persons. Also, the questionnaire was put online to receive larger feedback and therefore to collect more data.
Respondents were asked to answer four questions with regard to their visit of the Rotterdam Marathon. The questionnaire was available in both Dutch and English, since the Rotterdam Marathon has an
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international character. The results gave an overview of the expenses made by the visitors as well as of their reason of visiting. All respondents were anonymous, voluntarily and aware of the research project. The sectors in which the visitors spent money are the following: A. Wholesale and retail, B. Transportation and storage, C. Lodging, meals and drinks, D. Information and communication, E. Culture, Sports and recreation.
The questionnaires were collected on the day of the marathon, namely April 13th, 2014. The total of 77 questionnaires was conducted amongst the visitors of the Rotterdam Marathon (58 during Rotterdam Marathon, and 19 on the online questionnaire). In total the 77 responded spending of €1,348.00.The average spending was € 17.51 per person. Most of the money was spent in the wholesale and retail sector (see Figure 1).
AF
A €7,575,750
B €1,813,000
C €5,013,500
D €148,000
E €1,637,250
Additional jobs with FLQ Additional jobs with SLQ
A 94.91 96.36
B 14.98 15.41
C 94.89 96.37
D 4.62 5.87
E 40.61 42.85
Total 249.81 * 250 256.86 * 257
Culture,
Sportsand Increase in employment per sector
recreation
16% using FLQ
Information and
communication 2%
Lodging, meals and drinks 38%
Wholesale and retail 38%
Transportation and storage 6%
Figure 1 - Average spending per sector by visitors of Rotterdam Marathon
5. Results With the help of the Leontief equation, the change
On estimation 925,000 visitors were in Rotterdam in outputs could be computed. In order to compute
for the marathon of 2014. On the basis of the sur- the extra number of jobs the changes in outputs
vey and the total number of visitors the following re- needed to be divided by the annual national output
suits for the extra spending during the marathon (AF) per employee per sector, which resulted in the addi-
were found (Table 1). tional number of jobs (Table 2).
Table 1 - Spending by visitors per sector Table 2 - Additional jobs using FLQ and SLQ.
Figure 2 - Increase in employment with FLQ.
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Journal ^^ Bulletin oi Stavropol Region
Figure 3 - Increase in employment per sector withSLQ.
6. Conclusion
This aim of this paper was to evaluate the economic impact of an event, the Rotterdam Marathon, in terms of number of jobs.
To evaluate the economic impact an input-output analysis was applied. To regionalize the national input-output table, two different types of location quotients were used: SLQ and FLQ.
The results show that there is an impact in terms of additional employment and that there is a relatively small difference in outcomes between the two location quotients. The impact of the event was an estimated 257 extra jobs according to SLQ and 250 according to FLQ.
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