 Net economic change in the incomes of host residents that results from spending attributed to an event, attraction, or facility  Aimed to assure the public they are making “a profit” for subsidizing events.

Community pays taxes City uses tax $ to subsidize development of facilities & events To attract out of town visitors Who spend money in the local community Creating jobs in the community for those who pay taxes

 When visitors to an event spend money in a community, their initial direct expenditure stimulates economic activity and creates additional business turnover, personal income, employment, & gvt. Revenue in the host community.  Assumes businesses are interconnected  Impacts initial business as well as their suppliers, the suppliers’ suppliers….  Leakage – money that goes out of the community – outside suppliers, taxes

 First round of spending ◦ Local interindustry purchases..within the community  Restock inventories for future sales  Maintain buildings, equipment, insurance ◦ Direct household income  Employees, shareholders ◦ Local gvt revenue  Sales tax, property tax, license fees Accounted for in economic impact studies

 First round of spending ◦ Non-local interindustry purchases  Businesses located outside community ◦ Non-local household income  Workers outside the community ◦ Non-local gvt revenue  State income taxes, sales taxes NOT accounted for in economic impact studies…leakage

 Successive rounds of spending ◦ How local first round spending is spent

 Direct effects  Indirect effects ◦ Ripple effect if additional rounds of re-circulating dollars by local people & businesses ◦ Re-circulating dollars = multiplier effect  Induced effects ◦ Further ripple effects caused by employees of affected businesses spending their money on other businesses in the city.

 Business surveys ◦ Least desirable as figures are inaccurate  Visitor surveys ◦ Participants, officials, sponsors, vendors from outside community