Sports and Economic Development - Essay Sample

Introduction

Economic development in a given community can be brought about through different activities. Sports is one of the events that has helped many cities and states develop economically. The current paper discusses some questions about economic development regarding sports. The paper additionally uses the provided case study to answer the questions.

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Using a source, define economic impact in your own words

An economic impact is a financial effect that an activity, especially something new, has on a community or a situation. Economic impacts may get viewed regarding the value-added, business output, wealth created, jobs created, or personal income (Rosewell, 2016). Any of the above measures indicate an economic improvement for the community living in a given area. This is the primary aim of the efforts of economic development.

The net economic impact is referred to the overall expansion or contraction of an area's economy, due to a new change such as the establishment of a new facility (Rosewell, 2016). Sometimes, even an existing project or facility usually need an economic impact assessment. The assessment gets generally done in terms of the jobs provided to the community or the sales made. In the current case study, the buildings that are to be constructed by the giants, and the warriors will have an economic impact in the community.

Using the tangible benefit model found in the power points, explain how the model would apply to the presence of each or both facilities in the San Francisco area

Calculating a company's or an organization's tangible benefits and comparing them to another organization's tangible benefits is a measurement that is straight forward. Tangible benefits get indicated by a company or an organization in a form that is quantifiable (Brown, 2005). When individuals are looking for opportunities in organizations, they usually first have the idea of its tangible benefits.

Tangible benefits may be in the form of salaries, sharing of profits, or even insurance costs (Brown, 2005). In the case study, the tangible benefit model would apply to both facilities in San Francisco. The reason is that the two projects will generate revenue, which will help in the economic growth of San Francisco. Additionally, the project by the giants on the construction of affordable houses will be of great importance to the residents of San Francisco.

Explain why and how direct spending would be impacted by the dollars spent by fans from outside the community due to the presence of each or both of these facilities

Organizer and visitor spend significant elements of economic impact (Faricy & Ellis, 2013). A visitor-spend is the revenue that gets collected in a given geographical area from outside visitors. The visitors may mainly have visited the geographic area to attend a given event. For most of the events, visitor spend is usually the main constituent of economic impact.

The organizer-spend is the revenue corrected from the hosts of an event. Although the visitor spends is the crucial component of economic impact in a given game, the organizer-spend also generate income to the host economy (Faricy & Ellis, 2013). Jointly, the visitor and organizer-spend get referred to as a direct economic impact.

In the case study provided, both the Giants' and the warriors' projects contribute to direct economic impact. When the two facilities by the teams host events, they will attract visitors from outside San Francisco, and the visitors will bring dollars to the community. Through, this, the two facilities will impact direct spending on the economy.

Explain why and how indirect spending would be impacted by the dollars spent by fans outside the community due to the presence of each or both of the facilities

Indirect-spending is the expenditure on services and goods that are not direct components of a facility (Case, 2017). For instance, in this case, indirect spending can include travel and telecommunications. Indirect spending is essential for the continued growth of a facility or a company.

Indirect spending takes a large part of a facility's budget. However, those that get to manage indirect spending get to see exceptional results of substantial savings equally. Paying attention to the services and goods that fall under indirect spending can help in improving the quality of the services offered by the facility or company (Case, 2017). Additionally, it can also help in increasing the reliability of the services delivered to customers.

When fans come from outside San Francisco for events in the two facilities, indirect spending will be impacted by the dollars that they use. For instance, when fans from outside the community attend events in either of the two facilities, the linen-manufacturing industries in San Francisco will have an increase in sales due to sales made to the outside fans. The same case applies in the soft drinks and beer manufacturing companies.

Explain why and how induced spending would be impacted by the dollars spent by fans from outside the community due to the presence of each or both of the facilities

Induced spending is whereby dollars from outside the community are used to purchase products in the shops of the host of the event (Roberts, Roche, Jones & Munday, 2016). Induced spending leads to an increase in sales of household items. Such items may include groceries and house utilities.

Induced spending is mainly not by the visiting fans, but by the community living in the given area. For instance, car park attendants get tips after helping the visiting fans park their cars. When the attendants get the money and then use it to buy household items, then that can be referred to as induced spending (Roberts et al. 2016). In this case of the two facilities in San Francisco, induced spending would get impacted by the dollars spent by the fans. The fans would pay for services that they require from the community there, and then the community residents use the money to buy household items from shops in San Francisco.

Using a source, define leakage as it applies to economic development

Leakage is the income or capital that gets out or exits an economy instead of remaining in it. Additionally, it can get defined in economics as the outflow of money from a circular flow (Latimer, 2011). In a model comprised of two sectors, the income goes to the employer after the sale of goods and services. Likewise, it goes back to the employees through the payment of salaries and wages. In such a system, there is no leakage of income.

The leakage makes money exit from an economy, which results in the existence of a gap in the chain of demand and supply. Leakage occurs when money is removed from the economy by imports, savings, and also taxes. Additionally, leakage in the retail sector arises when customers use cash outside the local market (Latimer, 2011). Enterprises that find themselves in such situations have to come up with other methods of generating revenue.

Closed-circle income refers to when money flows from enterprises to homes in a continuous cycle (Latimer, 2011). Enterprises use cash to support the needs of labor and expansion of the businesses, whereas homes use their money to purchase goods from the businesses. In this case, leakage happens when the customers decide to use the funds elsewhere outside the closed circle.

References

Brown, S. (2005). Tangible Benefits. CFA Institute Magazine, 16(5), 46-47. doi: 10.2469/cfm. v16.n5.2951

Case, R. (2017). Spectator Spending at a Large Regional Volleyball Tournament: An Examination of Survey Methodologies. Athens Journal of Sports, 4(3), 181-196. doi: 10.30958/ajspo.4.3.2

Faricy, C., & Ellis, C. (2013). Public Attitudes Toward Social Spending in the United States: The Differences Between Direct Spending and Tax Expenditures. Political Behaviour, 36(1), 53-76. doi: 10.1007/s11109-013-9225-5

Latimer, P. (2011). Money and the English Economy in the Twelfth and Thirteenth Centuries. History Compass, 9(4), 246-256. doi: 10.1111/j.1478-0542.2011. 00760.x

Roberts, A., Roche, N., Jones, C., & Munday, M. (2016). What is the value of a Premier League football club to a regional economy? European Sport Management Quarterly, 16(5), 575-591. https://www.tandfonline.com/doi/abs/10.1080/16184742.2016.1188840

Rosewell, B. (2016). Economic Impact of Infrastructure. Welsh Economic Review, 24, 29. doi: 10.18573/10.18573/j.2016.10054