Building sport stadiums has not proven financially beneficial for local governments that have funded the construction of professional sport stadiums(Johnson & Whitehead, 2000). However, some invisible benefits occur if teams produce public goods such ...
Building sport stadiums has not proven financially beneficial for local governments that have funded the construction of professional sport stadiums(Johnson & Whitehead, 2000). However, some invisible benefits occur if teams produce public goods such as civic pride, fan loyalty or community spirit. People talk about the team, share their hopes for its success, and celebrate its victories(Johnson, Groothuis & Whitehead, 2001). In short, public goods generated by sport stadiums may be the main reason so many local governments decide to fund professional stadiums. Even though it is difficult to quantify such intangible benefits, some studies have attempted to measure the value of the public goods produced by professional sport stadiums or teams(i.e., Johnson & Whitehead, 2000; Johnson et al., 2001).
In this study, CVM, one of the effective methods to value public goods, is employed to value public goods by a sport stadium to be constructed for a professional baseball team. In order to estimate an economic value of the public goods, willing to pay for the stadium construction project needs to be analyzed using a scenario questionnaire including predicting variables such as demographic factors(gender, age, job, income and education), spectators’ consumption factors(spectating experience, distance, leisure type, interest level and administrative region) and perceived levels of public goods such as interest, discussion, fun, read and happiness. A CVM survey was performed with a total of 500 residents over 20 years old who could have the capability to pay tax for the stadium construction. Then, a binary logistic regression was modeled with a dichotomous dependent variable, willing to pay(Yes or No). This model estimates the odds that the dependent variable occurs according to independent variables(DeMaris, 1995). The following were input in the model as the independent variables in order to see the relationships; gender, age, occupation, income, education, location, leisure type, viewing experience, interest in team, awareness of new stadium construction, expenditure, and perceived effects of public goods(PEPG).
The results of the logistic regression analysis are as follows. Overall, the model was statistically significant, χ²(25, N=492)=168.208, p=.000. The model produced .290 of Cox and Snell R2 and .387 of Nagelkerke R2 respectively. Therefore, the model accounted for between 29% and 38.7% of the variation in willing to pay. Among the independent variables, gender, education, expenditure, and PEPG were found to be the significant factors to willing to pay. For gender, males, compared to females, were 1.94 times more willing to pay the taxes for the stadium construction. For education, subjects with college education and more, compared those with high school education and less, were 2.07 times more willing to pay the taxes. For expenditure, subjects were 9.48 times more willing to pay if the tax is 1 thousand won, compared to ten thousand won. Subjects were 4.09 times more willing to pay if the tax is 2 thousand won, compared to ten thousand won. Subjects were 3.19 times more willing to pay if the tax is 3 thousand won, compared to ten thousand won. For PEPG, the odds of willing to pay increased by 1.90 times with one unit increase in PEPG.
Also, the mean amount of willing to pay was estimated as 4,383 Won per person, which was calculated after simulation of 5,000 times(Krinsky & Robb, 1986) at the 95% confidence level, and the percentage of willing top pay was calculated 45.7%. Using such information and estimation model suggested by previous CVM research(Kang, 2009; Kwak & Yoo, 2012; Pyo, 2012; Choi & Kim, 2009; Kim, Lee, Shin & Kim, 2004), an amount of 29,931,780,825 Won was estimated as the total economic value generated by the sport stadium. However, the estimated value was not sufficient in comparison with the cost projected by the regional government.