NRPA Measuring Impact of Park & Rec

Measuring the Economic Impact of Park and Recreation Services www.NRPA.org National Recreation and Park Association © 2010 All Rights Reserved 48 When a copy of the rodeo economic impact study was reviewed by the author, it was found that it abused four central principles. The study included local residents, included time-switchers and casuals, used sales output as the measure of economic impact, and implied full-time jobs resulted from the visitors’ expenditures. The author’s response in his subsequent presentation to the city council was to replicate the presentation made to the park and recreation board, but then to extend it by referring to the rodeo study and showing the results if those erroneous assumptions were applied to the festival. The data in Exhibit 4-7 , p. 49, include time-switchers and casuals and sales multipliers. Respon- dents were asked questions that showed 27% of non-local participants were time-switchers who would have visited the city if the festival had not been held, but the festival influenced their decision to come at that time. Another 43% were casuals who would have come to the city at that time, irrespective of the event. They went to the festival because it was an attractive entertainment option while they were in the community. By inappropriately including those individuals in the analysis and by focusing attention on sales rather than personal income multipliers, the “economic impact” was claimed to be $125 million (as com- pared to $16 million in Exhibit 4-6). Exhibit 4-8 , p. 49, is the most egregious exaggeration of “economic impact” because it inappropri- ately includes local residents in the analysis; it prominently displays economic activity in terms of value of sales; it includes time-switchers and casuals; and it displays total jobs created, failing to note (as in the original rodeo study) that they are a combination of part-time and full-time jobs and that they are unlikely to be sustained because the festival will not provide a consistent flow of visitors throughout the year. Indeed, the results in Exhibit 4-8 are a measure of the festival’s economic significance not of its economic impact (Chapter 2). This illustration demonstrates the wide range of numbers that purport to measure economic impact that may be presented to stakeholders from the same set of primary data. If a press conference was held in city X to report the festival’s economic impact, the organizers could, at one extreme, announce that the sales output from economic activity associated with the festival was more than $321 million and that it generated 8,258 jobs implying they were full-time permanent positions (Exhibit 4-8). At the other extreme, they could announce that the economic impact of the festival on personal income was approximately $16 million and that while the analysis showed it generated 960 part-time or full-time jobs, there were some Exhibit 4-6 Economic Impact on Personal Income of Visitors to a Festival Items Personal Income Number of Jobs Created* Restaurants, Bars, Nightclubs 5,088,151 328 Admission Fees 874,005 67 Groceries 753,562 28 Retail Shopping 3,012,571 193 Lodging Expenses 4,449,879 256 Automobile Gas and Oil 502,541 25 Rental Cars, Taxis 1,319,433 54 Other Expenses 139,305 9 TOTAL 16,139,447 960 *This figure refers to both full-time and part-time jobs. It assumes the local economy is operating at full capacity and that there is no slack to absorb additional demand created by these events.