Total economic impact differs from direct economic impact in that it also includes the ‘secondary impacts’ of event-related spending that has positive indirect and induced effects on the host economy.
Indirect economic impact reflects the additional value generated for the host economy by businesses in the event supply chain spending increases in revenue earned from visitors and organisers.
Induced economic impact is derived from additional spending in the host economy that results from any event-driven increase in its residents’ incomes.
What to measure
The OECD and ASOIF recommend using the following measures to understand an event’s total economic impact:
- Indirect economic impact
- Induced economic impact
- The event’s impact on GDP
- Net injection into the host economy (direct, indirect and induced economic impacts)
The OECD considers these impacts to contribute towards the UN SDG Decent Work and Economic Growth (Target 8.1).
Total economic impact: How to measure it
An event’s total economic impact is the sum of its direct, indirect and induced impacts.
We calculate indirect and induced impacts by using standard multipliers to extrapolate their value from the direct impacts already assessed.
These multipliers are generally based on official datasets of input-output tables and household spending data. Input-output tables show the flow of goods and services across an economy and can be used to calculate the extent to which spending in one sector can generate value in another.
For context, total economic impact is often reported as a percentage of Gross Value Added (GVA) or Gross Domestic Product (GDP) at local or national level. It should be measured by professional research organisations with expertise in the analysis of complex economic data.
Total economic impact assessment in action
Case study: 2021 Rugby League World Cup
Case study: 2022 UEFA Women’s European Championships
Case study: 2023 Eurovision Song Contest