Estimating Local Welfare Generated by a First-Tier Licensed Football Stadium: Evidence from a European Minor League Case Study

Abstract

This study uses contingent valuation to estimate the welfare improvement from upgrading a local football stadium to comply with the first-tier requirements to avoid the local second-tier club being forced to relocate its home matches outside the municipality if it wins promotion. The survey was conducted simultaneously with a public hearing held by Helsingør Municipality (in Denmark) regarding the stadium upgrade. Eliciting willingness to pay using a single-bounded dichotomous choice question (referendum-style) for 1,354 respondents, the total economic value is estimated to be between €9.1 and €17.7m, aggregated for the 30,176 municipal households. Based on the non-use values, the maximum level of public subsidies that can be justified is estimated to be between €5.8 and €11.7m. Assuming a plausible 40% budget overrun, the non-use values amount to 40% to 86% of the budgeted capital construction costs, a considerably higher proportion than found in earlier contingent valuation studies, which can primarily be ascribed to the relatively low costs of upgrading the stadium.

Keywords

contingent valuation willingness to pay stadium subsidies football non-use values

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