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Originally Posted by tecumseh
I'm a traditionalist so I believe all football games should be played in the elements. That being said, retractable roofs are the best value for the community. They provide a great facility to attract large national events, which, in turn provide large cash infusions to those communities. I think the Colts have only played one game a year with the roof open so they're pussies but theres no discounting the value.
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http://blogs.wsj.com/numbersguy/the-...g-events-1159/
My print column this week examines estimates of economic impact from major events, including some of the big quadrennial ones this summer: the just-completed Summer Olympics in London, and the upcoming Republican and Democratic conventions in Tampa, Fla., and Charlotte, N.C., respectively.
Typically organizers of these events, or sponsors or other backers, cite specific and often large estimates of their economic impact. Some economists who have looked back at prior events say these figures are often exaggerated.
“Impact analysis adds and multiplies, but never subtracts and divides,” said Philip Porter, an economist at the University of South Florida in Tampa.
“Somehow, every city thinks that it will be different” than predecessors that didn’t see a big boon from big events, said Robert A. Baade, an economist at Lake Forest College in Illinois who has co-authored a study that found no significant economic impact from national political conventions. “You need people to believe that in order to get the money you need to host the event.”
One of the flaws these and other economists cite in the economic-impact estimates is equating government spending — on new buildings, or security, or infrastructure — with a positive economic impact. By that logic, said Porter, the U.S. government could end current economic doldrums by “hiring half the unemployed people to dig holes during the day and the other half to fill them back in during the night.”
Another common drawback with these estimates is unwarranted precision — citing an economic impact to four significant figures when it is impossible to predict the future with anywhere near that level of certainty. “Useful forecasts come with a measure of the uncertainty associated with them,” said Brad R. Humphreys, an economist at the University of Alberta.
One uncertainty plaguing political conventions is what level of disruption they will cause to usual levels of business. It is hard for this year’s host cities to realize the $150 million to $200 million in projected economic benefit, said Victor A. Matheson, an economist at the College of the Holy Cross in Worcester, Mass., “when the city essentially shuts down except for the convention.”
Ken Jones, president and chief executive officer of the host committee for the Republican convention in Tampa that is projecting an economic impact of $175 million to $200 million, said much of the city’s tourism economy is essentially shut down in a typical year during late August, when the convention will be held. Such nuances and differences between cities matter, Jones said: smaller cities such as Tampa may be better suited to reaping benefits from big events than larger cities with steadier, higher levels of year-round activity. “That’s what makes this economic impact greater for us, than for a different city,” Jones said.
Jones Lang LaSalle, a real-estate services firm, projected similar levels of economic impact for Tampa, though it also warned against ignoring the effects of crowding out locals and reducing productivity — and said conventions’ ability to boost future economic activity by increasing tenancy is unproven.
The Charlotte Regional Visitors Authority is projecting economic impact of $150 million to $200 million from the Charlotte convention. “Estimating economic impact in advance of a convention or event is often more an art than a science,” Tom Murray, chief executive of the authority, said in a statement this week. “Based on past conventions we predict it will be well north of $100 million, but it is essential we measure ourselves after the fact to see actual results. Regardless of the actual number, we know it will be a large, positive impact to our area.”
Allen R. Sanderson, economist at the University of Chicago, said that these conventions — plus the London Olympics as well as the games in four years in Rio de Janeiro — can’t be justified on business grounds, though perhaps they can as pleasure. “If Charlotte or Tampa or London or Rio wants to argue that they’re going to throw a huge party and, with their eyes wide open, they are willing to blow some fraction of their disposable income to do it, fine by me,” Sanderson said.
In support of his argument, Sanderson cited a bachelor’s thesis study this past April by his student, Samantha Edds. Edds, now working as part of Nielsen’s Emerging Leaders program outside Chicago, studied three recent host cities with paired cities in the same country that didn’t host the Olympics, and found little evidence of any boost to the hosts’ economies, other than Barcelona’s construction sector. She said that in her examination she found little evidence of hosts attempting to measure the economic impact after the events were over, “and it is unclear what would be the best methodology to minimize errors.”
Economists agree that it is too soon to assess the economic impact of the London Games, though some cite early reports of slowdown in business in London, particularly in the first week of the Olympics. “The Olympics were great fun but not a great economic boon,” Matheson said.
“The Olympic effect will be very small, apart from possible sales of sports and event equipment, businesses making sales on the back of their involvement in the Olympics, and the growth in indigenous industries such as cycle manufacture,” said Joshua Bamfield, director of the Centre for Retail Research in Nottingham, U.K.
Here, again, the characteristics of host cities matter. One common factor in big economic-impact estimates is the assumption that serving as a good host will boost a city’s image with tourists and businesses. London, though, say some economists, doesn’t have much room to grow with either group. “London was already on everyone’s tourism map,” Matheson said.
“The people visiting London for the games are taking the place of other tourists who would have visited even if the games would have been in Paris,” said Humphreys.
Tom Jenkins, executive director of the European Tour Operators Association, said the reality was even worse in London. The ETOA has studied prior games and found that tourism by many measures declines during the Olympics. Early reports suggest the decline was precipitous because of warnings from politicians about overcrowding on public transit. “What’s unique about 2012 is that London had the most to lose, and lost it,” Jenkins said.
Baade said it is possible that some cities really can realize the benefits from big events, so long as certain conditions are right: For instance, they are staged at times that aren’t already popular with tourists. It also helps if the city and its residents impress visitors, which is why even overly optimistic economic-impact estimates can be useful, and even prove to be self-fulfilling: If they help galvanize local support for the event, they can create the right kind of surprise for first-time visitors, who may return with their tourism or other business.
“Surprise cuts both ways,” Baade said. “You can have a good surprise and you can have an awful surprise.”
Stephen Lea, an economic psychologist at the University of Exeter in the U.K., said the British hosts provided a positive surprise. “It is perceived that the public and especially the volunteers were hospitable and friendly to visitors — counteracting the prevailing discourse that we’re a grumpy and dislikeable lot,” Lea said.
Whether that all adds up to the $26 billion positive economic impact forecast by Olympics sponsor Lloyds Banking Group is up for debate; so far, efforts to regenerate East London, a centerpiece of the economic plan for the Olympics are going slowly. Chris Daniels, head of London 2012 for Lloyds, said the bank’s report, commissioned to outside firm Oxford Economics, wasn’t biased by the sponsorship. “There is always going to be debate about the opportunity cost of all of this” government spending, Daniels said. “We went out deliberately to get an unbiased answer.”
“It’s debatable how much we would have promoted [the study] if it was a negative number” for economic impact, Daniels added. “Fortunately we never had to have a debate.”
In 2005, the U.K. government sponsored a study by PricewaterhouseCoopers that projected a much smaller economic impact of about $3 billion. PwC economist Mark Ambler, a co-author of the report, said that had the firm repeated the report closer to the event, it would have projected a larger number, because of growth in the government’s investment in the games. However, he added that it was important to calculate the net effect, after accounting for the opportunity cost of the government’s spending.
The U.K. government’s current estimate is of roughly a $20-billion impact from the games in the next four years, according to a government spokesman. However, the government will try to get a more precise figure based on what happened rather than sticking with its prediction of what was going to happen, undertaking a $2-million meta-evaluation of the games’ impact. “The public will want to know what the benefits of legacy programs are,” the spokesman said.