Towards an index to assess the novelty value of the investment in World Cup Stadia

Abstract

The costs of bidding to host mega sporting events such as the Olympics and FIFA World cups are huge. The demand for massive infrastructure to deliver such games is high irrespective of slow economic growth and constrained fiscal budgets. Very few governments are able to properly assess the actual economic value of the investments in infrastructure. The existing infrastructure appraisal and prioritisation methodologies usually take a very narrow view of value. There is scholarly evidence that there is little effort directed towards studies that investigate intangible benefits associated with infrastructural investment in stadia. Much research effort has been invested in the development of methods and models to measure the economic impacts of mega events. While the focus has been, on balance, on financial benefits of hosting mega events, the independent empirical research has found no evidence of economic benefits associated with mega sport events.

This study then determined, first the conceptual definition, and the nature of novelty value derived from infrastructural investment. Secondly, an index was constructed to assess the novelty value of infrastructural investment on stadia. The index creation process commenced with the identification of items that define the concept from literature. This was followed by interviews of key informants who are experts and insightful on world cup stadia infrastructural investment. The themes from literature as well as insights from key informants shaped the survey instrument for the second phase of the study. A sample (n =399) was drawn from the study population which is made up of patrons of Moses Mabhida stadium. Factor analysis, a multivariate analytical tool was used to develop a reliable novelty value index (V-ndex). The constructed index has three valid and reliable constructs; spectator experience, novelty continuance and modernity. These three construct define the nonfinancial value, which this study describes as novelty value derived from infrastructural investment. It is therefore recommended that when policy makers seek to assess the value of infrastructural investment on sporting facilities, they incorporate non financial value to the financial value added by investment.