A refreshed Events Calculator

Technical Terms Events Calculator

Collecting spending data for events

<p><span style="background-color:rgb(255,255,255);color:windowtext;">Based on user feedback, we’ve made changes that give the Events Calculator a fresh new look and make it easier to use. We have also taken this opportunity to update and improve the economic model that underpins the Events Calculator. These changes to the model mean results for the same event in the legacy and refreshed Events Calculators are not comparable. Here we explain the changes we have made and what they mean for you.</span></p><h2>Introduction&nbsp;</h2><p>Watch the video below for a step by step overview of the Events Calculator by Principal Consultant Rob Heyes.</p><figure class="media"><div data-oembed-url="https://youtu.be/DfQHFpmrGJw?si=2F08JxzORrUasurq"><div style="position: relative; padding-bottom: 100%; height: 0; padding-bottom: 56.2493%;"><iframe src="https://www.youtube.com/embed/DfQHFpmrGJw" style="position: absolute; width: 100%; height: 100%; top: 0; left: 0;" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen=""></iframe></div></div></figure><h4>&nbsp;</h4><h4><a href="https://events.infometrics.co.nz/" target="_blank" rel="noopener noreferrer"><span style="background-color:rgb(255,255,255);color:rgb(32,33,36);">→ </span><span style="background-color:rgb(255,255,255);color:windowtext;">Explore the refreshed Events Calculator</span></a></h4><h2>What's new?</h2><p>These are some of the benefits:</p><ul><li><span style="background-color:rgb(255,255,255);color:windowtext;">The Events Calculator has a new look and feel consistent with our Regional Economic Profile and Quarterly Economic Monitor</span></li><li><span style="background-color:rgb(255,255,255);color:windowtext;">It is easier to use, with fewer visitor types and spending categories, focusing on the categories that users say they actually use</span></li><li><span style="background-color:rgb(255,255,255);color:windowtext;">You can now see a quick summary of the main results in the tool, which makes it easier for you to go back and revise your inputs if necessary before you generate the final output report</span></li><li><span style="background-color:rgb(255,255,255);color:windowtext;">There is a new comparison feature which allows you to compare Return on Investment (ROI) and other results across several events</span></li><li><span style="color:windowtext;">There are now two types of output reports:</span><ul><li><span style="background-color:rgb(255,255,255);color:rgb(0,0,0);">A summary report which gives you the main results at a glance</span></li><li><span style="background-color:rgb(255,255,255);color:rgb(0,0,0);">A full report which details your inputs, results, and our methodology</span></li></ul></li><li><span style="background-color:rgb(255,255,255);color:windowtext;">Our economic impact methodology has been improved and updated</span></li></ul><h2>A simplified and updated methodology</h2><h3><span style="background-color:rgb(255,255,255);color:rgb(15,36,62);">Updated national input-output tables</span></h3><p><span style="background-color:rgb(255,255,255);color:windowtext;">Underpinning the Events Calculator is a model of the national economy which quantifies the flow of goods and services between industries. This model draws on national accounts input–output tables published periodically by Stats NZ. For example, if an event results in an additional $100,000 being spent in the retail sector, the input–output tables tell us which other industries will benefit because they supply goods and services to the retail sector.</span></p><p><span style="background-color:rgb(255,255,255);color:windowtext;">The legacy Events Calculator was based on older input–output tables published by Stats NZ. The refreshed Events Calculator is based on the next iteration of input–output tables for 2020. Between 2013 and 2020 the structure of the New Zealand economy underwent significant change. For example, the whole economy grew by 26%, the hospitality industry grew by 32%, and the retail industry by 40%. These changes in the structure of the economy, are reflected in the updated input-output tables.</span></p><h3><span style="color:rgb(15,36,62);">Updated regional input-output tables&nbsp;</span></h3><p><span style="background-color:rgb(255,255,255);color:windowtext;">Infometrics recalibrates the national input-output tables to reflect the structure of regional economies, using our analysis of regional economic structures. These regional input-output tables have been updated with the latest data and better reflect current economic linkages.</span></p><h3><span style="color:rgb(15,36,62);">Updated output to employment ratios&nbsp;</span></h3><p><span style="background-color:rgb(255,255,255);color:windowtext;">The Events Calculator estimates the economic impact of an event in terms of Gross Domestic Product and translates this to employment effects using GDP to employment ratios. These ratios have been updated with the latest data.</span></p><h3><span style="color:rgb(15,36,62);">Employment is now based on full-time equivalents (FTEs)&nbsp;</span></h3><p><span style="background-color:rgb(255,255,255);color:windowtext;">Our employment estimates are now based on full-time equivalent (FTEs) workers rather than a count of workers. FTEs are a better measure of employment impacts because part-time workers are counted less than full-time workers.</span></p><h2><span style="background-color:rgb(255,255,255);color:rgb(15,36,62);">What these changes mean for you</span></h2><p><span style="background-color:rgb(255,255,255);color:windowtext;">Changes to the methodology underlying the Events Calculator mean that results from the legacy Events Calculator are not comparable with results from the refreshed Events Calculator. This difference may be an issue for you if:&nbsp;</span></p><ul><li><span style="background-color:rgb(255,255,255);color:windowtext;">You have been comparing results for the same event held regularly over time, such as an annual music festival&nbsp;</span></li><li><span style="background-color:rgb(255,255,255);color:windowtext;">You have created an event that is to be held in the future (based on assumptions about visitor numbers and spending) and you want to compare the results with the actual results after the event has taken place.</span></li></ul><h2>Our recommendations going forward</h2><p><span style="background-color:rgb(255,255,255);color:windowtext;">Create any new events in the refreshed Events Calculator&nbsp;</span></p><p><span style="background-color:rgb(255,255,255);color:windowtext;">We will continue to make the legacy Events Calculator available until 31 July 2024. This is only to allow clients to access results for events they have already created. If you have any events stored in the legacy Events Calculator that you want to continue to access after 31 July 2024, you can download the results into a PDF document.&nbsp;</span></p><ul><li><span style="background-color:rgb(255,255,255);color:windowtext;">If you have been comparing results for the same event held regularly over time in the legacy Events Calculator, we recommend you recreate at least one of the past events in the refreshed Events Calculator. This will give you a baseline which you can use to compare results for future events.</span></li><li><span style="background-color:rgb(255,255,255);color:windowtext;">If you have created an event in the legacy Events Calculator that is to be held in the future, we recommend that you recreate this event in the refreshed Events Calculator and use those results as a benchmark to compare against when the event is held.</span></li></ul><p><span style="background-color:rgb(255,255,255);color:rgb(0,0,0);">If you have any questions about the changes to the Events Calculator, including on our advice for comparing results between the legacy and the refreshed Events Calculator over time, please get in touch with us at</span><span style="color:windowtext;"> </span><a href="mailto: info@infometrics.co.nz"><span style="color:windowtext;">info@infometrics.co.nz</span></a><span style="color:windowtext;">.</span></p><p>&nbsp;</p>

<h2><strong>Types of economic impact</strong></h2><h3>Direct impact</h3><p><span style="background-color:rgb(255,255,255);color:rgb(43,48,58);">This is the impact associated with increased spending directly in each industry associated with the event. For example, if attendees at an event spend $10,000 on accommodation, then turnover in the accommodation industry will increase by $10,000.</span></p><h3><span style="background-color:rgb(255,255,255);color:rgb(43,48,58);">Indirect impact</span></h3><p><span style="background-color:rgb(255,255,255);color:rgb(43,48,58);">The indirect impacts are the second round of economic effects associated with the direct effect. For example, the $10,000 increase in turnover in the accommodation industry may require accommodation providers to purchase more cleaning products from local wholesalers thus generating economic activity in the wholesale trade industry. The increase in economic activity in industries with linkages to the accommodation industry is an example of the indirect event impact.</span></p><h3><span style="background-color:rgb(255,255,255);color:rgb(43,48,58);">Earnings impact</span></h3><p><span style="background-color:rgb(255,255,255);color:rgb(43,48,58);">The earnings (or induced) impact arises from increased spending from new employment associated with the event. For example, the increase in demand for accommodation may encourage hotels to take on extra casual staff to cope with the increased number of guests. These extra workers will spend some on their earnings locally, for example at bars, which will induce extra economic activity.</span></p><h3>Total impact</h3><p>The total effect is the sum of direct, indirect and earnings effects.</p><h2><strong>Definitions of measures of economic impact</strong></h2><h3>Turnover</h3><p>The total value of goods and services that are produced as a result of the event. Turnover is the same as value of sales or gross output.</p><h3>GDP</h3><p><span style="background-color:rgb(255,255,255);color:rgb(43,48,58);">The increase in the value of the goods and services generated in the economy as a result of the event which, when aggregated, totals Gross Domestic Product (GDP). It is the sum of salaries and wages, depreciation, profits and indirect taxes less subsidies.</span></p><h3>Household income</h3><p>The overall increase in household earnings of people in the area as a result of the event.</p><h3>Employment</h3><p>The additional employment, expressed as new Full-Time Equivalent (FTE) jobs, generated as a result of the event. Employment is expressed in terms of annual employment. In other words employment is measured in terms of the number of full time positions which last a full year. If the event created 365 jobs for one day of the year this would be equivalent to one annual FTE.</p><h2><strong>Measuring economic impact using multiplier analysis</strong></h2><p>The Events Calculator applies multiplier analysis to the estimates of spending at the event to measure the impact of the event on the local economy. Input-output multipliers measure the ripple effects throughout the local economy from an injection of spending into industries related to the event. The multipliers enable us to estimate how economic activity in one industry flows through to other industries and ultimately households.</p><p>This appendix provides some methodological background to multiplier analysis and outlines some of its limitations and caveats.</p><h3>We use proprietary regional multipliers</h3><p>In undertaking multiplier analysis, Infometrics draws on its own series of regional multipliers. We regionalise national level multipliers using a top-down approach. We have calculated multipliers for 54 industries in each territorial authority and region in New Zealand.</p><h3>We use partial equilibrium analysis</h3><p>Partial equilibrium analysis means that the impact of the event is assumed not to have a material impact on the resources used in the regional economy. The key assumption is that the supply of capital, materials and labour can grow to meet the additional demands generated by the event and the flow on multiplier effects without resulting in resource constraints in other industries and therefore displacement of other economic activity. This is generally a sensible assumption if the event is small enough within the regional economy so that any change will only have a marginal effect on the allocation of resources. The application of multiplier analysis also assumes that other activities in the area (e.g. local spending, regular tourism etc) are not displaced or crowded out in the leadup to the event, during the event and immediately following the event.</p><h3>We assume that the event is not business as usual</h3><p>By using multiplier analysis in regional economic analysis we assume the event is additional to existing activity and would not have been undertaken anyway. If this is not the case, the resulting economic impact would most likely be lower than that generated by the multiplier analysis.</p><h3>It is less accurate for smaller regions</h3><p>As with most types of economic analysis, multiplier analysis can be less accurate for smaller regions. Some regional economies are not as clearly defined as others. In some areas it can be easier to move between regions and participate in more than one economy (e.g. someone could work in Wellington City but spend a large proportion of their income in Upper Hutt City). For regions where people can participate in more than one regional economy, especially smaller ones, the accuracy of multiplier analysis can be diminished.</p><h3>We assume no slack in the economy</h3><p>Multiplier analysis assumes that there is no under employment in the area’s economy. If there is slack in an area’s economy, the estimated increase in employment may be overstated.</p><h3>We ignore spending of locals</h3><p>Expenditure by local resident attendees is not included in the estimate of regional economic impact because we assume that if the event did not take place, the same level of spending would have occurred on something else. In this sense, the estimate of economic impact is therefore considered to be conservative.</p><h3>Return on investment should be higher than 1.2 to be worthwhile</h3><p>If public funds are put towards an event, then the return on investment should ideally be higher than 1.2, at a minimum, for the public funding to be worthwhile in economic terms. This is because the process of raising public funding through tax or rates distorts behaviour in the economy, encouraging people to work or spend differently to how they would otherwise. The Treasury suggests that 20% is a good approximation for this distortionary effect (called the deadweight cost of taxation), and therefore, at a minimum, public investments should return a benefit that is 20% higher than the costs (a return on investment of 1.2).</p><h3>Use caution when interpreting return on investment</h3><p>The return on investment estimate is based on an input from the user and may not capture the total cost to the region. Spending may be substituted from other areas, such as attendance fees of local residents and sponsorship from local companies and so the true cost of hosting an event is often higher. The return on investment estimate is intended as a broad guide for councils to assess the benefit of committing council funds to an event and can help compare events on a relative basis.</p>

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A refreshed Events Calculator

Technical Terms Events Calculator

Collecting spending data for events