Costs: The Rest of the Economic Impact Story

in Journal of Sport Management
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  • 1 Texas A & M University
  • | 2 University of Oregon
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Economic impact studies are frequently commissioned to justify investments in sport projects. However, decisions also should include a consideration of a project’s costs since it is the net return on investment that should drive decisions. Whenever taxpayer funds are expended on a sports project there is an opportunity cost. Three types of opportunity cost are discussed. Explicit costs are those for which a government entity “writes a check.” They are comprised of event costs, land and infrastructure costs, and operations and maintenance costs. Implicit costs are those which remain “hidden” from most taxpayers: foregone property taxes, strategic underestimation of capital costs, displacement costs, and an inequitable nexus between payers and beneficiaries. External costs are those incurred by taxpayers beyond the boundaries of a local jurisdiction.

Crompton is with Texas A & M University, College Station, TX. Howard is with the College of Business, University of Oregon, Eugene, OR.

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