Measuring the economic and social value of sport and active recreation: How is it done?

A research team from the University of Sydney has published a comprehensive review of the methods used to assess the value of sport.

The Commonwealth Secretariat is embarking on a mission to design model indicators to measure the contribution of sport, physical activity and physical education to the Sustainable Development Goals. Although such a project has rarely been attempted on a global scale, reports measuring the value of sport and active recreation at the event, regional, state or national level are becoming increasingly common. For example, similar analyses have been undertaken in New Zealand, England as well as varying states in Australia. These reports, commonly undertaken by consultant groups are likely the result of national and state sport sectors needing evidence the justify continued funding or a need to produce new evidence to help advocate for a bigger ‘slice of the pie’.

Last week, a team of researchers from the University of Sydney published a comprehensive review of the methods that have historically been used to put a dollar figure on the value of sport. Lead author Lewis Keane led a team of sport sector, public health and economics experts in Professor Bill Bellew, Professor Adrian Bauman, Dr Justin Richards and Dr Erin Hoare in conducting the review and critically examining the relative strengths and weaknesses of each method.

After examining over 6000 initial articles, the paper published in the ‘Sport in Society’ academic journal conceptualised ten distinctly separate methods that have historically been used. Further to this, the authors found that these methods could be dichotomised into methods that were most appropriate at the sub-population level (single/specific aspects of sport and active recreation such as mega events, parks and recreation, stadiums) and those better suited at the population-level (impact at the regional/national level such as gross domestic product).

Subpopulation methods included:

Cost/Benefit Analysis [CBA], which compares the economic benefits generated for a region or country by a project, to costs in the form of a cost/benefit ratio.
Financial Accounting [FA], which measures value through financial accounting records.
Tourism Models [TM], which examine the economic effects of tourism through expenditure modelling.

Population methods included:

Sport Satellite Accounts [SSA], which uses a country’s system of national accounts to construct a statistical framework to measure the economic value of the sports industry.
Input-Output Tables [I-O], which adopt a macroeconomic approach, simulating economic impact of investment shifts by creating economic models.
Estimated Market Valuation [EMV], which estimates the worth of larger aspects of sport and recreation that can be valued at present market prices.
Computable General Equilibrium Modelling [CGE], which uses national statistics to simulate changes in value from shifts in sport policy or investment
Health modelling [HM], which measures health savings from the increase in physical activity and accompanying decrease in risk factors for non-communicable diseases, stemming from an increase in investment in sport sectors.
Social Return on Investment Modelling [SROI], which measures the value of goods with no market value through a ‘proxy’ value of a good with similar attributes.
Surveillance Augmented Value Estimation [SAVE], which uses other methods included in this review as its base calculation, with the inclusion of representative social impact surveys to qualitatively assess additional benefits.

With the sport and active recreation sector competing for highly competitive government- and international-level funding under ‘best-buy’ scenarios, the refinement and development of methods that capture the value created through the well-documented and wide-ranging value areas appears central to increasing advocacy for increased investment for sport, and standing on the world stage as a global tool for development.