A method for calculating the crowding-out effect in sport mega-event impact studies: The 2010 FIFA World Cup

Tourist expenditures constituted the largest part of the economic impact of South Africa's 2010 FIFA Football World Cup. However, limited air transport capacity and increased accommodation prices may have led to crowding-out effects. Until now, crowding-out could only be considered by using econometric modelling based on data of inbound arrival or accommodation statistics. This paper suggests a methodology for measuring the crowding-out effect precisely. It is based on the available statistics in South Africa and is applicable at province level. An important innovation is to distinguish crowding-out from time-switching effects. The paper explains the theoretical framework of crowding-out as part of impact measurement, discusses the technical problem of assessing crowding-out, and supplies formulae for calculating this effect. Although this is a study of the 2010 FIFA World Cup 2010 specifically, the methodology described here is appropriate for calculating the impacts of other mega-events.