Socio-Economic Impact Analysis
May 18, 1983
This Socio-Economic Impac.t Analysis was prepared by a team of
five Kansas State University students under the direction of Dr.
Randy Pohlman. The reader is encouraged to keep in mind this
report was prepared by students working within a very limited
time frame. While the students exhibited a genuine interest and
put forth a great deal of effort in the research project, it is
not intended to be a professional product, Our cost for the
study was $300.00, which covered telephone calls and supplies.
The students and Dr. Pohlman have encouraged us to make a critical
review of the report. Two of the five members of the team will be
seniors next year at K~State, and one will be working on his
Master's Degree. They have expressed interest in doing a follow-
up project through the fall ('83) and spring ('84) semesters. A
very cursory review of the report would indicate that we would
benefit from having the follow-up done, wherein the research data
would be broad 1 an.d the information refined.
~. U
j
Bill Harris, Manager
kef
l' 'I
~
~
-
~
~
~.
i
~
I
~
~
~
~
~
~
~
i
~
~
,;
BICENTENNIAL CENTER
SOCIO-ECONOMIC IMPACT ANALYSIS
by
Rex Gore
Doug Hubler
Dan Johnson
Layton Smith
Hossein Varamini
for
Capital Budgeting
. Spring. 19B3
I
I
i
,
~
~
~
~
~
,
,
,
,
,
~
~
~
~
~
SOCIO-ECONOMIC IMPACT STUDY
. PURPOSE
The purpose of this study was to determine the aggregate socio-economic
impact of the Salnia Bicentennial Center on the Salina Community. The primary
focus was on the net economic benefit accruing to the cOmmunity from the
existence and ~peration of the Center. Additionally. we hoped to gain insights
into the general attitudes and levels of awareness of the community about the
Center. Finally. it seemed probable that our research and findings in those
areas would produce. as a by-product. potentially helpful insights into events
mix. advertising focus. and revenue structures.
METHODOLOGY
Surveys were the primary means of Obtaining information for determination
of the economic impact. as well as attitudes. In determining economic impact
a questionnaire was randomly distributed at selected events. This information
was analyzed and was then used in combination with relevant information from
other sources to determine the expenditure levels by attendees at different
types of events. These expenditures were then adjusted with economic output
multipliers to ascertain the net economic benefit of expenditures. .These
figures combined with attendance figures by event category produced a figure
which represents the net total economic impact of expenditures by attendees at
Bicentennial Center events. A more complete explanation of economic models.
the multiplier concept. survey instruments. and the telephone attitude survey
can be found in Appendixes A. B. C. D.
In order to discover the underlying attitudes and perceptions. a random
telephone survey was conducted in the Salina area. This consisted of asking
all or part of a series of open-ended que~tions designed to induce the partici-
.
I
I
-
-
-
-
-
,
,
,
,
,
,
,
,
~
~
~
~
pants to communicate their attitudes toward the Bicentennial Center and its
service to the Salina community. A more complete descripti6n of the survey and
results may be found in Appendix D.
Recommendation concerning the events mix and advertising focus was based
upon analysis of information obtained in the expenditure survey and phone survey.
The expenditu~ survey in particular was designed, in part, to obtain potential
information about trade areas and where people. had learned about the event.
RESULTS.
The economic impact of the Center on the community is very large, indeed.
Our calculations indicate a figure in the area of 19 million dollars. Even
~{1j) .sY
~.
when all the figures were alanyzed very conservatively, the results show an
impact of 13 million dollars. Any way it is viewed, the net economic impact
of Bicentennial Center operations is far larger than the shortfall in the
operating budget. However, it must be stressed that though the results con-
clusively show a very large net economic benefit, it must be remembered that
these numbers are only estimates of actual expenditures. Actual expenditures
over a wide variety of events throughout a year might differ significantly
from these. . Nevertheless,. sensitivity analysis performed to test the signifi-
cance of these potential differences, demonstrates that, barring gross errors,
the net impact is very large. The.derivation of these results and performance
of sensitivity analysis can be seen in Appendix E.
An explanation of the phone survey results can best be characterized as
ambivalence or neutrality. While there were those who held a strong opinion,
pro or con, about the Bicentennial Center, the majority were holding a close
to neutral position. This suggests that there are a potentially significant
number of people who might be moved from this neutral stance into a firm stand
for, or against, the Center.
2
___-.J
---...
I
I
I
I
I
-
I
-
I
I
I
I
I
a
~
~
-
~
-
The impact of changes in events mix was analyzed to see if they would
be beneficial to the community at large and/or to the Bicentennial Center.
Our analysis demonstrates that the Bicentennial Center would be able to
decrease their operating deficit by shifting their events mix toward
entertainment events and away from conventions. However, any increase in income
to the Bicente~nial Center from such a shift would be greatly outweighed by a
decrease in economic benefits to the community. Those events which produce the
highest income per person to the. Center tend to be the same events which bring
a lower economic impact per person to the community. An example of our analysis
can be found in Appendix E.
An analysis of the survey did not provide any conclusive evidence concerning
advertising. Reference to the main computer program shows in bar graph form
where people heard about the specific event. Making conclusion concerning the
direction of future advertising focus would be dangerous in light of our limited
information.
CONCLUSIONS
It appears that the economic impact of the Bicentennial Center on the
Salina community is very significant. These benefits far outweigh any subsidi-
zation of the Center by the community. Most members of the community have a
neutral attitude about the Center, an attitude which would likely be more
favorable if they understood the positive economic impact of Center operations.
Viewed in isolation the Center could most probably improve their financial
position by shifting events emphasis; however. this would be at the expense of
economic benefits to the community. Finally, while the. survey provided an
indication as to where attendees heard about the event, recommendations concerning
advertising emphasis would need to be based upon careful and informed analysis of
current advertising mix.
3
I
I
I
I
I
I
-
,
,
,
,
-
,
,
,
~
~
~
~
~
APPENDIX A
ECONOMIC IMPACT
USE OF THE MULTIPLIER
The term economic impact is usually taken to refer to the effect on such
"economic" conditions as level of output, employment, or i-i1come. The economic
impact of a regional project, however, extends beyond the immediate effects to
incorporate the subsequent repercussions,as they work their way through the
local, regional, or even national economy.
The most common form of e~9nomic impact analysis is based on ,the-Keynesian
concept of "multiplier". This concerns the way in which an initial increase in
income from one source will multiply by stimulating the generation of further
income in other activities. The identification of a local or regional multi-
plier effect involves the estimation of how much additional local or regional
income will arise from an initial expansion in local or regional income-
generating activity.
In general~ a change in regional income will have three types of impact
in the short-run: The "direct impact" of the wages, salaries, and profits
of the firm which indicates the first round effect of change in income, the
"indirect impact" from payments to regional sectors supplying goods and
services to the firm, and the "induced impact", which is the increase in
payments to regional consumer-goods industries and their regional suppliers
brought about by spending out of the new income.
I. THE MULTIPLIER CONCEPT
In order to analyze the economic impact of different events in Bicentennial
Center on Salina's community, the Keynesian multiplier concept is used to find,
the overall economic impact over time. A complete explanation of economic impact
models and their applications are presented in Appendix B.
4
~.
The Keynesian multiplier gives recognition to the fact that each dollar
,
spent on goods and services will give rise to an increase in total income of
several dollars. The multiplier is the ratio of the change in equilibrium
income divided by original change in spending that caused the change in real
income.
II. HOW THE MULTIPLIER WORKS
Assume the Salina Bicentennial Center hosts an event in which participants
and visitors spend a total of $100,000 in the Salina community, both to the
Center and local businesses. This $100,000 is paid to the Center for rent and
maintenance, local businesses and service organizations such as catering,
security, ushers, etc. This spending goes for wages, goods,'and profits. The
$100,000 is now the income of the Center, local businesses, and local service
organizations.
The owners and workerS will not keep an the $100,000 in the bank. They
will spend some of it. They will spend $100,000 times the Marginal Propensity
to Consu.ne.(MPC). Assume that MPC is equal to .80. This means that the owners
and workers will spend $80,000 and save $20,000. This $80,000 is a net addition
to Salina's demand for goods and services, just like the first $100,000 expendi-
ture. Total spending at this point is $180.000.
This process will continue as the recipients of the first round's
5
,
,
,
,
,
,
,
,
,
,
expenditure will continue to spend 80% of what they receive as income. The
,
total expenditure reaches the $500,000 mark eventually as the multiplier
model predicts but this takes an infinite number of rounds. However, after
the 20th round, the majority of the total expected expe~diturehas already
taken place. . This demonstrates. that the impact of the multiplier occurs
fairly quickly-and its affect is strong even without it having run its full
course (Appendixes 83 and 84).
In our analysis the multiplier figures used were out of multipliers which
had been derived in an input/output study done on the Topeka, Kansas community.
(See Appendix 85). Due to regional proximity and similarities between the two
communities it was assumed that the Topeka multiplier would represent a sound
proxy for Salina. Potential differences in the total impact caused by
differences between the true multiplier numbers in the two communities are
analyzed using sensitivity analysis (see Appendix F).
~
,
~
,
~
,
~
~-
6
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
APPENDIX B
MULTIPLIER MODELS
,
,
When evaluating a public program, such as Bicen~ennial Center, Utis often
important to know what effect a proposed policy or event will have on the
output, income, or employment of the region. We are interested in the answers
to questions such as: How much additional income will be generated by a given
program? HOw many jobs will be created? How much additional output will be
produced? Which. sectors in the region will be affected most? Multiplier
analysis, in the input-output framework, is a tool that can help answer each
question.
There are three basic categories of models to calculate the multipliers
of the economic impact analysis. These categories are economic base,. econome-
trics, and input-output models.
I. ECONOMIC BASE MODELS
Economic base models dichotomize economic activity in a region into export
and local industries. Sectors and establishments within the local economy that
cause funds to flow in are considered to be export industries. Local service
industries, by contrast, sell their outputs only within the local economy.
The economic base model can be characterized as a highly simplified
general equilbri~ model of a local economy. Prtces, wages, and technology
are assumed constant. supply is perfectly elastic (it ignores the supply side
of the local economy), and no changes in the distribution of income or resources
are allowed for.
II. ECONOMETRIC MODELS
Econometric models are multiple-equation systems that attempt to describe
the structure of a local economy and forecast aggregate variables such as income,
7
I
I
I
I
~
I
~
~
~
~
~
~
i
-
I
I
I
I
I
employment, and output. The crucial distinction between the economic base and
econometric models relates to the implementation and measurement of the
structural relationships rather than their theories of regional growth.
Econometric models employ time series data (rather than the typical single
period reference of economic base models) to construct the model and estimate
the hypothesiz~d relationships by means of regression analysis.
One of the most important drawbacks of econometric models is due to a lack
of data for a regional model. Furthermore, econometric models, like economic
base models, are generally highly static. The behavioral relationships tend to
omit lagged variables since autocorrelation problems may result and relatively
few degrees of freedom characterize the model. Other statistical problems,
such as multicollinearity, may bias coefficient estimates, and the interdepen-
dencies that exist in a region practically assure correlated movement of
economic series.
III.. INPUT-OUTPUT MODELS
Input-output models provide a great deal of detail on the economic trans-
actions that take place within a local economy 'and offer some understanding as
to how impacts originating in one sector are transmitted throughout the region.
Input-output models take a disaggragated perspective in investigating the
level and mix of economic activity in an urban economy. Essentially, input-
output is a method of tracing and using information about the transactions
between buyers and sellers. Production functions for each industry are linear
and homogeneous so that economies and diseconomies of scale are disallowed and
inputs must be used in fixed proportions. Prices and wages are assumed con-
stant and no supply constraints exist. With these assumptions we can represent
a typical input-output structure mathematically as:
8
I
t
~
I
~
~
~
~
~
.
,
~
,
~
~
~
~
~
~
~
s
x. = 1:
1 j = 1
x. .
lJ
t
+ 1:
f =
V.f + e.
1 1 1
; = 1,2,....,5
f = 1.2......t
where
x. = total sales of industry in region i
1
Xij = sales of industry in region i to regional industry j
Vif = sales ~f industry in region i to final demand sector f
ei = export sales of indus~ry in region i
s = number of. industries
t . = number of final-demand sectors excluding exports
Because of the assumptions used to develop the input-output model. these
models are most appropriate in short run analysis. As far as aggregate
estimation is concerned. a number of studies have shown the mathematical
identity of input-output and economic base multipliers. In practice. the
multipliers derived from these two models tend to be similar.
In brief, the multipliers derived from economic base. econometric. and
input-output models have many similarities and there is no one method that
yields gener~lly superior multiplier figures. All model.s implicitly assume
that at the reference point. the economy is in equilbrium. Further. all
models are highly static so that the dynamic relationships inherent in the
economy are not well represented. Does this criticism imply that the mOdels
are. not very. accurate in forecasting the economic impact? No, it merely means
that one should not expect too much of these models and that accuracy should
be-defined in relative terms.
Since input-output models provide insight into the regional economic
impact which originates in one sector. it is more appropriate for our purpose
to use this model. For short-run forecasting (less than five years) a static
approximation and unrealistic assumptions such as those incorporated in the
input-output model. should not lead to significant biases.
9
I
I
I
I
I
I
I.
I
I
I
I
I
I
I
I
I
I
I
I
REAL
SPENDING
2000
1600
,APPENDIX BZ
I
I I
1400 I
-
45
1600 2000 REAL INCOME
11
.
I
I
I
I
~
I
-
-
-
-
-
~
-
~
I
I
~
I
~
ctlMllLATIVE
SPENDING
toTAL (000)
-
APPENDIX B4
HOW THE MULTIPLIER BUUnS
500
400
300
200
100
o 1 2 3 4 5 6 7 8 9 10 11 12 13 14 IS 16 17 18 19 20
SPENDING ROUND
13
I
I
II
II
II
I
II
~ '
III
,>
~
I
I
I
I
,
If"
,
I
,
,
,
APPENDIX C
DESIGNING THE QUESTIONNAIRE:
Questionnaire construction is properly regarded as an imperfect art. There
are no established procedures which will consistently lead to a "good" question-
naire. One consequence is that the range of potential error contributed by
ambiguous ques~ions may be as much as 20 or 30 percentage points. Fortunately,
such extreme errors can be Sharply reduced by common sense and the insights
from experience of other researchers.
A good questionnaire is much more than a collection of unambiguous questions.
First, the scope of 'the questionnaire should be nor more or no less than is
necessary to satisfy the objectives of the study. This seems a banal statement,
but is no less difficult to achieve because it is so obvious. A further condition
is imposed by prior choice of data collection method. While this choice is the
result of many factors, it does set definite limite on the number, form and
ordering of the specific questions. A final condition is imposed by the
respondent's willingness and ability to answer. Although the wording and
sequence of questions can facilitate recall and motivate more accurate responses,
there are definite limits to what can be done.
The most difficult step is specifying exactly what information is to be
collected from each respondent. Close examination of' the project proposal and
purpose, greatly facilitated determining what information was required from a
respondent. After this choice was made the decision of using open-response or
closed-response questions had to be faced. Even though the open-response
questions would have given responses that may have been more accurate, the
perceived difficulty to a respondent of fil)in9 out this type of survey would
be very large. This perception would have greatly reduced the number of surveys
that were returned. In view of this disadvantage, and lack oT convincing
15
I
I
I
I
I
-
~
~
~
I
~
I
I
I,
I
I
I
I
I
evidence that open-ended questions provide more meaningful responses, it is
generally advisable to close up as many questions as possibl~ in large-scale
surveys.
Now that the choice of closed-response questions has been made, the next
step is to design the questions themselves. The nature'of the closed-response
questions require that every question has all possible answers'to choose from.
Again, it is obvious that if a choice of answers is provided; all possible
solutions they feel is right. In the design of each question it is extremely
important that the vocabulary of each question'is simple, direct, and familiar
to all respondents. This is so that everyone will understand what is being
asked of them.
It is ,a primary goal in questionnaire design to avoid ambiguity or vagueness.
Each question must be examined closely to see that the question itself does not
suggest a certain answer. The question must not be double barreled in that it
asks two questions at the same time. An example of the last two types of
questions together would be "Have you often, sometimes, hardly ever, or never
felt bad because you were unfaithful to your wife?" This question directs a
person to select that they "often felt bad", but the question itself is double
barreled. The question assumes the respondent has been unfaithful to his wife
and further assumes the respondent to be male.,
After these design flaws have been,tested to ensure that none exist in any
question. the order of questions on the questionnaire is studied. It is
generally accePt~ that some respondents will not finish the survey. Thus. to
obtain the maximum amount of information possible the demographic questions are
placed last. What this really means is that if someone fills out only half of
a questionnaire, you want that half to be the more important information on the
survey. For example, on the questionnaire that was used in Salina we were much
16
~
I
I
~
~
~
~.
~
~
I
~
~
I
I
~
I
I
I
I
more interested in the amount of money people spent rather than their age or
sex. Thus, the questions about age and sex came at the end'of the survey.
After the questionnaire was completed, pretesting was done to point out
if any of the problems involved in developing .questionswere overlooked and
included. After this test was done the questionnaire was revised arid the
follwoing questionnaire was used in the subsequent surveys. (Appendix C-l)
.~~~.-:..,"
17
(' , "~,'
"f ~~';."
~,
W~~i:€:-':'
'It~~;:
~i~~'
t~"'-:' .
~::.,
dll{:
lw,,',::::"
t"".,,,.;.r-
~!.t.z."'"
f",~,':"
'1':;(';
-1!-~_ '
.- "~< .
~~"-J
.'_:
I" "
I
~
~
~
~
~
~
~
~
~
-.......-
APPENDIX C-l
In ordszo tobsttw sSzorJS you p1.eass fi.1.1. out this lIUrI1sy.
1. Counting this event, how many times have you been to the Bicentennial Center?
ONE [] TWO [] THREE [] FOUR OR MORE []
2. ,How far did you travel to come to this event?
o to 5 miles [] ,
More than 5 miles but less than 25 miles []
More than 25 mi 1 es but 1 ess than 50 mi 1 es []
More than 50 mil es [] ,
I am uncertain 0
3~ Which State are you from?
Kansas []
Other
4.
Which County are you from?
5.
If yOu live outside of Salina, did you come here
Solely for this event []
For this event and dining/entertainment []
For this event and to shop in town []
For this event, Shopping, and dining/entertainment []
I did not come to Salina intending to attend this event []
I live in Salina []
Other/don I t recall, []
Did you come to this event ea!l.Y, or plan to sS!>' later, to shop in the stores
in Salina? Yes 0 No U, Undecided U, ,
While in Salina, how much will you fersonally spend on the following items?
Please spe~ify the amount if possib e., ,
A. Food' and beveraqes
Nothing " 0
Less than $10 0 '
S10.01to $20 []
$20.01 to $40 '0
6.
7.
More than $400
specify if possible $
I don't recall []
B. 'Purchases excludinq food and beveraqes while shoppinq in Salina
Nothing []
Less than $10 []
$10.01 to $20 0
$20.01 to $40 []
Hare than $40 []
specify if possible $
I don't recall []
18
.
~ -' .
~'r~
-, r~ -"
~F;i:~~-:~,:' .
,.' "'-.
1"'*':
,;".'i'''.'~. ,: .
1~.~If ...
\~--.
r"
~. ..
I
I
I
,
I
I
-
I
11.
"
,.~
.
c. Gasoline
Nothing 0
Less than.$10 0
$10.01 to $20 0
$20.01 to $40 0
More than $40 0
specify if possible $
I don't recall 0
D. Other expenses
Nothing 0
Less than $10 0
$10.01. to. $20 0
$20.01 to $40 0 .
More than $40 0
specify if possible $
I don't recall 0
8. Did you. or are you planning to spend the night in a hotel or motel in Salina?
No 0 Yes 0 If yes. how many nights: ONE 0
TWO 0
THREE OR MORE 0 No._
I DON'T KNOW 0
9.
Select as many as are appropriate.
From a friend 0
other D. .
I don't recall 0
10.
Sex:
.
Female 0
Male 0
(0 II 'r r 0 N A I,J
--------
BANB:
AJJllESS :
~:
STATE :
ZIP CODE
PHOBE: AC
TO BE ELICIBLE FOR DRAWINC - FILL OUT AND PLACE SURVEY IN CONTAINER
19
--
,-~'.
.
1::,'""
II
II
II
II
--
~. ....
-
,~.- -
.t.
APPENDIX 0
TELEPHONE SURVEY
The use of an Objective survey is gaining empirical information about a
topic is probably the most acceptable and trustworthy instrument available.
The data gained is random and Objective. However, in a case such as the
Bicentennial Center other vital information is necessary. Along with demo-
graphic and purely statistical information, the'feelings and suggestions of
the peripheral community must be viewed. An additional survey should be used
to gain insight into the attitudes and awareness levels about the Center.
The methodology used in this study was a random telephone survey. The
weekend, was chosen as appropriate in order to get a cross section of businessmen,
. housewives. and teenagers. etc. Members of our group selected one or two names
from each page of the Salina telephone directory. This random sample of residents
was called and asked" to express what they saw as strong points of Salina. If the
Bicentennial" Center was not mentioned. we then asked questions in that direction.
Specifically. we asked them if they thought the Center was an asset to the
community. We then followed with questions concerning the events they attended.
what effect the center has on them. and if they could suggest any improvements.
INTERPRETATION
This survey brought out some interesting results. These back the socio-
economic strongpoints of the Bicentennial Center. Many view it as an asset to
Salina and Saline County.
Of those surveyed. some 82% of them indicated they do t~ink the Bicentennial
Center has bettered the community. Of those that said it was not an asset. 40%
qualified it by saying that they thought it was a waste of taxes or that it was
not paying for itself at first, but added that "as far as the economy stands
tOday. it is doing a great business". Many similar comments were expressed
20
I
I
I
I
I
I
I
I
I
I
I
I
I
-
-
-
I
I
I
showing a diversity of opinion. Several people complained about the concert mix.
Either there are too many 'rock and roll' bands or there was ,too much 'country'.
The mix is almost exactly SO/50 simply reflecting the different tastes in music.
Many of the elderly people claimed that there is no entertainment for
middle aged and older people. Most of these people have never been to the center
or claim that it is too expensive, so the 'addition of events geared specifically
toward the elderly would not necessarily, produce any special benefit to the
Center or the community. In correlation to this problem, however, many people
claim that the benefit to the younger crowd is tremendous. "It keeps kids
busy," remarked many of the parents, "It also gives a lot of kids part-time jobs
so that they are doing something constructive." There was also a definite
request for more family entertainment.
One problem mentioned by a few of the'concerned residents was that there
is a bad environment 'as the'center with uncivilized behavior and illegal drug
use. However, these complaints were made by those who have rarely been to the
center.
Our group's objective was to find out ways the Bicentennial Center could
improve its current status. Rental of the smaller rooms was often'mentioned
, in both the written and telephone surveys. The revenues from this type of
rental barely 'cover the fixed expenses incurred, but extra attention to detail
and public relations could make such, rentals worth the price.
The most: frequently mentioned problem was ticket distribution. Many
eustomerscl~imed that they had ordered tickets by credit card or telephone,
being assured that excellent seats were available. However, the tickets
received were for average seat locations; some were behind the band. Some
method of first come, first served needs to be arranged and adhered to.
a!
21
1
1
I,
I,~,. ,.
:,",:
','
~,.,>. "".
I.
I'"
~~,'
I"' ~;;.~/ .
~:::. '
--.~~.~"
i" J:z'
"'".'" .
.~~~';: .
i'.. c.
....., .
, ~..i)~ ~,"
r.~r!:
I:. .
I";~',K'."';:" .
'~;il"
~" ~.
t.
I
t
I
i
I
,
,
I
I
CONCLUSION
Being subjective in nature this survey could be construed as being
. ineffective since attitudes can change like hot and cold water. Our group
has discussed this possibility and related it. to the results of the survey.
It appears that some 10%-15% of the community definitely feel that the center
is an asset to Salina; serving it's cultural and entertainment as well as
informational needs. There is also an equal 10%-15% of definitely negative
residents that condemn the center as a tax burden or an unnecessary,evil.
There remains that 70%-80% majority which could be swayed to either
position depending upon the Center and it's public relations and ad~ertising.
The Center could perhaps concentrate advertising on the idea of "the family
oriented Entertainment Center.D' Possibly using taped positive interviews
about why the Bicentennial Center is an asset to the community. ' They could
explan how it provides everything from new technological information through
trade shows to meeting places for conventions, reunions and conferences; how
it provides musical entertainment from Country & Western to Rock & Roll to
classical or jazz bands; or how it offers various sized rooms available for
parties. wedding receptions, or just business meetings. These types of
interviews have been used effectively to support the fair groundS in Topeka.
An emphasis should be placed on building the image that the Bicentennial Center
"serves the community" and perhaps a catchy logo to emphasize pride in the
Center should be started. (Similar to the "Ah....Ah Kansas, Kansas" theme.)
Along with the statistical Economic Impact survey, the results of this
attitudinal awareness survey should be used to persuade that 7~-80% majority
of community to favor the Center and back its existence.
ft
.2~
-=~...~. .,.- ,--
I
I
I
I
I
I
I"
I
I
I
I
I
I
~
~
~"
I
I
I
,~ .....
EXPLANATION OF ECONOMIC IMPACT FIGURES
1. Expenditure per person is figured (referring to expenditure charts) using
the weighted average number of people ,in each dollar amount category for
that item of expenditures. This figure is then multiplied by the follar
amount midpoint of that expenditure category repeating 'this procedure for
all five categories and combining gives a total weighted average expendi-
"ture per person.
2. The total economic impact of expenditures per person is found by multi-
plying the average expenditure per person by the economic output multiplier.*
*Ba8ed on Topeka's eaonorrric output muZtipliezo (as ezpZained in
"Input-Output MuZtipliezo" appendi:r:J. Sensitivity anaZysis b1i.ZZ
, be done to determine possibZe va2"iations.
NOTE: Lodging r.1a8 based on an avezoage hoteZ aost of $30/night.
(Salina ~eZ' of CormzezoaeJ
3. Attendance numbers are based on 1980, 1981, and 1982 quarterly reports of
event mix and attendance records, while omitting strictly local events.
4. The weighted average multiplier impact is determined by dividing the
expenditure per person in each expenditure group by the total expenditure
per person. This will give the weighted average in each expenditure
category. This amount is taken times the multiplier to find a weighted
multiplier impact in each category. Adding these together gives a total
weighted average multiplier impact.
23
,.
1.',
I :.~.'.':",'.'.,F::';
:_,::'!,.j.'"
. ~-_..
^'-'.
I'. :":;:'~:
"-,,,'-
.~," .
! ~'"':::
~- "~...
.'. -'
". >..
....co.
" '.H
,'n
I'i..,.,'.
,:... i<,(,.
,
,
\
,
APPENDIX E
In this appendix the economic impact per event is separated by
Bicentennial Center events. Appendix El shows the economic impact using
Topeka's output multiplier as a proxy for Salina. A ten percent increase and
decrease in the multiplier and the effects of these changes on the total
economic impact are shown in appendices 02 and E3 respectively. Appendix E4
explains the change in the expenditure/person at sporting events~ . Appendix.
E5 explains our figure of $85.70 for' convention expenditures/person. Multiplied
by the average weighted multiplier (1.85), the impact/person then becomes
$158.55.
24
_..p'"
"'.~, ~
',. .".~, .
-'" '~"'r '
~~~;?: ",.
~~\,:.-
~~~L..
~:
It
;:~Si.;:'
~>>;;;:;..~,
,,"'. ,~.U_
APPENDIX E1
TOTAL ECONOMIC IMPACT TO COMMUNITY
Explanation - The following Table shows the Aggregate Economic Impact of the
. Bicentennial Center on the Salina Community. It was derived by taking the
average 1980-82 attendance by.event times the dollar impact per person to. the
Communi ty. .
. AVERAGE YEARLY PERCENTAGE OF $/PERSON TO
TYPE EVENT ATTENDANCE EVENT MIX COMMUNITY TOTAL
SPORTS 49101. 00 23.14 44.35 2177619.35
ENTERTAINMENT 72715.00 34.27 108.69 7903393.35
TRADE SHOW-Vis 76603.00 36.11 89.80 6878949.40
CONVENTIONS 13735.00 6.47 158.55 2177684.25
-
TOTAL 212154.00 100.00 19137656.35
25
l. .'
. ~ ;'~:;~;:-,;- .
. ,._~_._,.:,._.
~i.l~;~t'..~.~;' .
I'~ ':zF..
:~:c,\~,'_';,:":7, .,-
.....~~.~K;..,":.
~"-:1'4'"X,T
:'f'.1.:~aT):"';-:.~
~i~~l{
..:, 7.-'_'-,'~ -
;(:;".<
L<'lV7>",.-
~~'.7'.;:.:"."~.::::' .
. ,~"R- >',;4-
:>.o!r1t,~~
:,,.
.f-,~';' .
t~~~~:
;lr~?~~,c. .
"~~;j. .
~,,,_,'i".'
k-:-
~~~~:~-~'.
~~">~
~"."~"'""'"
l~;;:r;'
:ll h'~'"
~C'\,";;'~;". ..
"f:::c;.
;ki'\,:,"
.;":;-.;.
;,~tt:..
t~;. .
~ -'~
~
~
~
~
~
I
I
I
APPENDIX E2
TOTAL ECONOMIC IMPACT TO COMMUNITY 30%
REDUCTION IN $/PERSON TO COMMUNITY
Explanation. -- The following Table shows a conservative estimate of the
Aggregate Economic Impact of the Bicentennial Center on the Salina
.
Community. This estimate was obtained by reducing the per person
economic impact figures by 30%. This should more than compensate for
the possible uverstatement. of per person expenditure levels used in
Obtaining .the original estimate.
AVERAGE YEARLY PERCENTAGE OF $/PERSON TO
TYPE EVENT ATTENDANCE EVENT MIX COMMUNIlY TOTAL
SPORTS 49101. 00 23.14 31.05 1524340.55
ENTERTAINMENT 72715.00 34.27 76.08 5532375.35
TRADE SHOW-Vis 76603.00 36.11 62.86 4815264.58
CONVENTIONS 13735.00 6.47 110.99 1524378.98
TOTAL 212154.00 100.00 13396359.45
26
,
III
,.
,
..
,
,
,
,.
,
,
III
,
,
,
,
,
,
,
APPENDIX E3
TOTAL ECONOMIC IMPACT
10% MULTIPLIER REDUCTION
Explanation -- The following Table again shows a more c9nservative Estimate
of the Aggregate Economic Impact of the Bicentennial Center on the
Salina Community. This estimate was obtained by a 10% downward adjustment
of the multiplier. figures. This was to account for any possible difference
between Topeka and Salina output multipliers
~~~J
AVERAGE YEARLY PERCENTAGE OF $/PERSON~f
TVPF ~VF'NT ATTFNnANCF EVENT MIX COMMUNITY TOTAL
SPORTS 49101.00 23.14 39.91 1970620.91
ENTERTAINMENT 72715.QO 34.27 97.B2 7Ui981.30
TRADE SHOW-Vis 76603.00 36.11 80.82 6191054.46
CONVENTIONS 13735.00 6.41 /'fh/'f 85.10 un J(lJ..5~
TOTAL 212154.00 100.00 --16451644 . d1.
SUMMARY
Total 01'iginal Impact
30% Reduction in $/person Impact
10% Multiplier Reduction
19.137.656.35
13.396.359.45
16.151.644.07.
27
.
I
I .
. ...
Id
-::
~<.
-
C <.
~.
~..
~
~
~
~
~
~
~
~
~
~
~
EVENT MIX -- Sensitivity Analysis
Explanation - The following table will look at the impact of changing the
events mix. This involves analyzing the impact of an events mix change
on the aggregate economic impact to the community. Following, this is
of the impact of an events mix change on the net income to the center
itself.
AVERAGE YEARLY PERCENTAGE OF $/PERSON TO
TYPE EVENT . ATTENDANCE EVENT MIX COMMUNITY TOTAL
SPORTS 49101. 00 23.14 44.35 2177629.35
ENTERTAINMENT 71715.00 [34.27 I 108.69 7903393.35
TRADE SHOW-Vis 76603.00 36.11 89.80 6878949.40
CONVENTIONS 13735.00 I 6.47 I 158.55 2177684.25
TOTAL 212154.00 100.00 19137656.35
AVERAGE YEARLY PERCENTAGE OF $/PERSON TO
TYPE EVENT ATTENDANCE EVENT MIX COMMUNITY TOTAL
SPORTS 49101.00 23.14 44.35 2177629.35 ·
ENTERTAINMENT 58978.00 27.81 108.69 6410318.82
TRADE SHOW-Vis .76603.00 36.11 89.80 6878949.40
CONVENTIONS 27472.00 12.94 158.55 4355548.24
TOTAL 212154.00 100.00 1 9822445.81
28
I
I
II
~
~
~
~
~
~
,
SUMMARY
Ooubli~g the Convention Attendance with an equivalent decrease in
entertainment attendance has the following effects.
I
!
To the Salina.Community
19137656.35 vs. 19822445.81
= $684,789
= 3.6% Increase
To the Bicentennial Center
250247.66 vs. 256704
= $6,457
= 2.6% Decrease
NOTE: $1.00 CII1Iount used in tabLes are simpLe for iLLustration.
TOrAl ECONOMIC IMPACT
(1980-1982) . y1f
AVERAGE YEARLY PERCENTAGE OF $/PERSON~O
TYPE EVENT ATTENDANCE EVENT MIX BICENN. CENTER TOTAL
SPORTS 49101. 00 23.14 ;;F- 1.00 49101. 00
ENTERTAINMENT 72715.00 I 34.27 L r!J. L.r 1.59 115616.85
TRADE SHOW-Vis 76603.00 36.11 -11<; 1. 00 76603.00
CONVENTIONS 13735.00 I 6.47 I (L k 1.12 15383.20
TOTAL 212154.00 100.00 ~~104.Q~
*Q.~L.: f1~
AVERAGE YEARLY . PERCENTAGE QF $/PERSON TO~ I
TYPE EVENT ATTENDANCE EVENT MIX BICENN.CENTER TOTAL
SPORTS 49101. 00 23.14 1.00 49101. 00
ENTERTAINMENT 58978.00 27.81 1.59 93775.02
TRADE SHOW-Vis 76603.00 36.11 1.00 76603.00
CONVENTIONS 27472.00 12.94 1.12 30768.64
TOTAL 212154.00 100.00 250247.66
!
,
,
,
,
,
29
APPENDIX Fl
-~
This number uses' the original findings from the survey.' In our comparison
data the number was divided in half to come up with a closer eXpenditure
estimate per person.
SPORTS
Multiplier
Expenditure/Person
Impact/person
Tot. Attendance
Total Attendance
1981 Total Impact
ECONOMIC IMPACT PER EVENT
FOOD
AND
JmW. GAS LODGING SHOPPING OTHER
1.74 2:"00 1.84 1.85 1.88
13.87 8.32 7.68 10.44 7.67
24.16 16.64 14.16 19.35 14.38
45376.00 46376.00 45376.00 45376.00 45376.00
1096354.04 755056.64 642611.28 877813.24 652563.60
50700.00 50700.00 50700.00 50700.00 50700.00
1224990.08 843648.00 718009.34 980807.72 729129.38
51228.00 51228.00
51228.00
51228.00
Total Attendance . 51228.00
852433.92 725486.84 991022.05 736722.68
1237747.37
30
WEIGHTED
AVERAGE
MULTIPLIER
1.85
23.99
89.69
45376.00
4024398.80
50700.00
-4496584.52
51228.00
4543412.86
1
I, .
. . APPEND IX F2
I ECONOMIC IMPACT PER EVENT
I: The following charts show total economic impact per person in each spending
category of each Bicentennial Center event.
1 FOOD WEIGHTED
AND AVERAGE
SPORTS DRINK GAS LOD~fNG SHQPP~ ~ MULTI PLIi
1 Multiplier 1.74 "'2.'00 .84 . 1. .. 1.
Expenditure/Person 6.94 4.16 3.84 5.22 5.22 23.99
Impact/Person 12.08 8.32 7.08 9.67 9.67 44.85
1 Tot. Attendance 45376.00 45376.00 45376.00 45376.00 45376.00 45376.00
1980 Total Impact 548177 .02 377528.32 321305.64 438906.62 326281.80 2022199.40
1 Total Attendance 40700.00 50700.00 50700.00 50700.00 50700.00 50700.00
1981 Total Impact 612495.04 421824.00 359004.67 490403.86 364564.69 2248292.26
1 Total Attendance 51228.00 51228.00 51228.00 51228.00 51228.00 52118.00
l 1982 Total Impact 618873.69 426216.96 362743.42 495511. 03 368361.34 2271706.43
ENTERTAINMENT
I Multiplier 1.74 . 2.00 1.84 1.85 1.88 1.84
Expenditure/Person 18.14 9.07 4.90 18.75 8.09 58.95
Impact/Person 31.60 18.14 9.04 34.74 15.17 108.69
I Tot. Attendance 73031.00 73031. 00 73031.00 73031.00 73031. 00 73031. 00
. 1980 Total ]mpact 230770.84 1324782.34 659878.90 2537370.81 1107788.98 7937591.87
I Total Attendance 47926.00 47926.00 47926.00 47926.00 47926.00 47926.00
1981 Total Impact 1514455.85 869377.64 433040.17 1665128.96 726977.51 5208980.13
~ Total Attendance 97188.00 ..97188.00 97188.00 97188.00 97188.00 97188.00
1982 Total Impact 3071129.14 1762990:32 878151. 89 337665.58 1474220.48 10564167.40
I
I
I
~ 31
~
~ .
III
III
,
,
,
,
,
,
,
,
,
,
~
APPENDIX F3
~1~,1
p;
U~-Y~
The original $47.98 per person expenditure for sporting ~vents (derived
from a survey of the 4A State Basketball Tournament) appeared unrealistically
high. An analysis of respondents suggest an explanation for this. Although an
aattempt was made at administering a random survey, t~ appears that responses
were weighted heav~ly toward the older age categories (70% of respondents wer
over 35). It appears that in this situation those in the older age categories
were more responsive to completing and returning the surveys.
The majority of respondents in this age category represent the "heads of
households." If we assume each "head of household" spent money for at least one
other person, which is a relatively conservative assumption, then a smaller
dollar amount should be alloted to the expenditure/person category. Additionally,
it is apparent that this particular event was weighted very heavily towards out
of town visitors who would logically be spending more money.than those who would
more 'typically' be attending a sports event at the Bicentennial Center.
These two factors combined with our desire to err, if at all, toward conserva-
tism led us to $23.99 as a figure to use for sporting events. (This number was
found by dividing original amount of $47.98 in half). This figure is considered
to be a more accurate reflection of expenditure by the 'typical' attendee at a
sporting event.
32
---
t
I ,.
I r'
APPENDIX F,Cont'd
~
I FOOl} WEIGHTED
AND AVERAGE
TRADE SHOWS-Visitors DRrNK GAS I.llDGING SHO~~~a~ ~~ ~
I Multiplier 1.74 2.00 1.lf4
Expenditure/Person 9-.96 9.01 1.53 19.43 8.32 48.25
Impact/Person 17.35 18.02 2.82 36.00 15.60 89.80
Tot. Attendance 74190.00 74190.00 74190.00 74190.00 74190.00 74190.00
I .1980 Total Impact 1287220.24 1336903.80 209313.73 2671121.18 1157364.00 6661922.95
I Total Attendance 83167.00 83167.00 83167.00 83167.00 83167.00 83167.00
1981 Total ImPact 1331974.06 1498669.34 234640.72. 2994327.20 1297405.20 7468016.53
I Total Attendance 74741.00 74741.00 74741.00 74741.00 74741.00 74741.00
1982 Total Impact 1296780.27 1346832.82 210868.28 1690959.27 1165959.60 6711400.23
I TRADE SHOWS-Exhibitors
Multiplier 1.74 2.00 1.84 1.85 1.88 1.85.
~ Expenditure/Person 9.80 5.63 12.20 8.32 6.10 42.05
Impact/Person 17.07 ..11.26 22.50 15.42 11.44 77.68
Tot. Attendance 350.00 350.00 350.00 350.00 350.00 350.00
~ /9'lJJ
<i898- 5975.06 3941.00 7873.88 5395.94 4003.13 27189.00
1982 Total ImPKt
~ CONYf;~OtiS --. 85,70
mpact/Person
Tot. Attendance 22404.00
~ 1980 Total Impact 1920022.80
~ Total Attendance 8256.00
1981 Total Impact 707539.20
~ Total Attendance 10545.00
1982 Total Impact 903706.50
~
~ 33
~
~
I
I
I
I
I
I
I
~
I
~
~.
I
I
I
I
I
I
I
I
~ 8 ~~~7
APPENDIX F5 Cont'd vf- y:-V \JI""'" ~
The figure used for convention expenditures was based upon an inflation
and regional cost of living adjusted figure from the International Association
of Convention and Visitors Bureau 1978-1979 Income Survey.. This.extensive
survey consisted of the administration of an open ended survey instrument to
over 80,000 delegates at more than 1400 conventions in 57 different.cities.
The response rate approached 40%. These factors, in combination, suggest that
.
this survey produced an accurate, unbiased estimate of national convention'
delegate expenditures. For this reason we feel the adjust figure we have used
provides a very good indication of the expenditure levels of an average attendance
at a Bicentennial Center Convention.
Average Expend:/Delegate X
State & Region. Conven.
j~}
July 79--March 83
inflation Adjust.
Regional Cost of
X Living Adjustment
..
64.72
X
1. 356
x
.976
.. 85.70
SoW'Ce: IACUB Convention Income E:r:pendituZ'e
Ec:onomic Indioa1;pre March '83
MonthLy Labor Review Ai'riL '83
34
BIBLIOGRAPHY
.~2Baumol, William and Alen S. Blinder, Economics, Principles.
'):and Policy, 2nd Edition, Harcourt Brace Jovanouch Inc.,
,~'New York, 1982.
.~:Brooman, Frederick and Henry Jacoby, Macroeconomics, Aldine
:Publishing Company, Chicago, 1970.
. . , Guidance for Project Evaluation, United Nations,
_~,New York, 1972.
....;,
~"-: ,
;;:ii"f!i_,.
7.'. Hirsch; Werner, Urban Economic Analysis, McGraw-Hill Book
'~company, New York, 1973.
~'.Jensen, R.C., T .D. Mandeville, and N.D. Karunaratne, Re~ional
."Economic Planning, Croom Helm, London, 1979.
Miernyk, William H., ~ional Analysis and Re~ional Policy,
Oelgeschlager, Gunn, ana Hian, Publl.shers, Inc., Cambn.dge,
'1982.
Mishan, E.J., Economics for Social Decisions, Praeger
Publishers, New York, 1974. .
Nourse, Hogh, Re~ional Economics, HcGraw Hill Book Company
'New York, 1968. .
leeter, Paul, Economic ImEact Analrsis: MethodolO~ and
Applications, Martlnus Nij hoff Publl.shlng, Bos ton, :I: 77.
"<.-/--
.Snedecor, George and William Cochran, Statistical Methods,
;27th Edition, The Iowa State University Press, 1980.
~~/
35