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The Economic Contribution of Sport to Australia

The Economic Contribution of Sport to Australia. Presentation made to the Australian Sports Commission. 3 December 2009. Starting points. The key questions: What is special about sport? Why should government support it? Need to show that Not “enough” sport without government support

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The Economic Contribution of Sport to Australia

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  1. The Economic Contribution of Sport to Australia Presentation made to the Australian Sports Commission 3 December 2009

  2. Starting points The key questions: • What is special about sport? • Why should government support it? • Need to show that • Not “enough” sport without government support • Use of public resources for sport gives better outcomes than alternatives

  3. Social Utility Public goods Private goods Success at elite level Increased consumption Social cohesion Reduced health costs Increased production Increased GDP Increased productivity Increased physical activity Volunteers Public policy for sport sector Community programmes Elite programmes

  4. Community level sport Health Volunteers Social cohesion • Impact on measures of specific diseases • Gross health costs savings $1.2 billion pa • Productivity induced GDP growth gains of about 1% pa (about $12 bn) • Sports volunteers account for 33% of all volunteers and 26% volunteer hours • Imputed value about $4billion • Increases production of sport activity • Some direct health benefits • Hard to quantify • Intervening factors complicate analysis

  5. Policy implications • Volunteers • Provision of infra-structure • Training • Efficiency and equity aspects • Cost of participation in sport • Access • Opportunity cost of time • Psycho-social factors • Mix of public finance and regulatory instruments • Need for more research to substantiate impacts…. • …but stronger case than for other types of preventative health measures

  6. Elite sport W Is spending justified? Value of success Basis for policy • Evidence • Willingness to pay (WTP) • Measures of well being • A pure public good • Limitations of markets • Compare spending with WTP • How much does well being change with change in spending

  7. Elite sport – some rough numbers What is WTP? How does that compare? Caveats • About $23 to buy a percentage point of happiness for 1 week per household • Wellbeing index moved 2-4 points over Athens 2004 • Based on Australian Unity Calculations • Total high performance sport budget about $20 per household per year • Rough numbers • Average, not marginal • Not fine-grained for some policy issues

  8. Policy implications • Identify drivers of value • Questions remain about marginal effects • E.g. valuation of changes to medal table • Valuation of certain sports • Matching investment to demand • Main need is for more thorough quantification of value/ willingness to pay

  9. The remaining research agenda • Understanding role of volunteers • Measuring willingness to pay • Which sports confer most satisfaction? • Evidence related to social benefits • impacts relative to other instruments • Which sports/ activities • Historically, sports policy largely aspirational in nature and based on emotional appeal • Challenge is to meet demands of evidence based policy

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