Grand Prixtensions

The Economics of the Magic Pudding

Is the economic impact of the
Grand Prix worth the public
investment?


A Critique of the Economic
Impact Evaluation of the
1996 Transurban Australian Grand Prix

Prepared for the Save Albert Park Group

Economist At Large & Associates

Table of Contents

• GRAND PRIXTENSIONS - EXECUTIVE SUMMARY
• 1/ Misrepresentation of the economic benefit
• 2/ Overstated and non-existent economic effects of the Race
• 3/ Missed Opportunities
• Summary Table
• GRAND PRIXTENSIONS - DETAILED SUMMARY
• The AFOGP EIA: Post-Event Rationalisation
• Government claims - based on wrong numbers
• Survey method shows bad economic practice
• Survey ignored 'stay-aways' and 'go-aways'
• Key visitor numbers are over-estimated
• Key expenditure effects not backed by evidence
• $95.6m gross benefit expenditure reduced to $43.93m
• Net economic benefit shrinks
• AGPC operating loss is about $5m
• Alternatives could make profits, cut debt, cut taxes & boost tourism
• Minus 20% return on investment
• $500m vs $22m after 10yrs
• Victorians are worse off
• Australians are poorer!
• Let the Winners compensate the Losers

Grand Prixtensions - Executive Summary

The Victorian Government claims that the Grand Prix held at Albert Park during 1996 created $95.6m in economic benefit to the State. This so-called economic benefit was derived from an economic impact analysis of the 1996 Australian Formula One Grand Prix (AFOGP) commissioned by the Victorian Government and released last year. The Premier told Parliament that:

..Simply because we held the race, we gained an economic benefit to industry in the state of $95.6 million of extra expenditure. (Jeff Kennett, Victorian Parliamentary Hansard, 14 May 1996, Questions Without Notice, page 23)

This claim was repeated more recently as a justification for accepting a $2.7m loss from the 1997 Grand Prix. However, an extensive review of the economic impact study titled Grand Prixtensions (GP), prepared by Economist At Large and Associates, has found that:

1. the above claim is a misrepresentation of the size of the economic benefit;
2. claimed gross benefits are overstated or non-existent; and
3. ironically, compared to what might have been achieved, Victorians are poorer where they could have been wealthier, if the Government had chosen a more "boring" investment than the Grand Prix.

1/ Misrepresentation of the economic benefit

The Government's economic impact analysis (AFOGP EIA) states that the Albert Park Grand Prix created a gross economic benefit of $95.6 million in 1996. Use of this gross estimate misleadingly overstates the economic benefit of the Grand Prix. The AFOGP EIA, by its own reasoning, should have reported the net benefit estimated on page 62. The gross benefit records only the estimated economic impact of the Grand Prix. The net benefit records the alleged economic impact of the Grand Prix, after subtracting the alleged economic impact of the projects that were given up to pay for the Grand Prix. Page 62, Table 7.4 of the AFOGP EIA, under the column headed 1996, reports that the net economic benefit figure is $46m (in 1990 dollars) - or $51.49m in 1996 dollars. This represents the first year impact in a three year cycle. The AFOGP EIA data, which we do not accept, suggests that the average annual net economic benefit of the Grand Prix is in the order of $57.72m in 1996 dollars. After analysing the data presented in the report, we suggest that the actual economic impact is more likely to be an annual $23.67m or lower.

2/ Overstated and non-existent economic effects of the Race

The AFOGP EIA analysis is critically dependent on expenditure estimates obtained by survey and other means. The AFOGP EIA estimated gross direct expenditure (the first round of payments) resulting from the event at $64.33m. By contrast, we estimated direct gross expenditure at $29.55m. The difference between our estimate and that provided by the EIA is due to some of the estimates, within the EIA analysis, being wrongly included or overstated. Examples include:

• The survey did not account for 'stay-aways' and 'go-aways' - people who avoided Victoria or left Victoria because of the AFOGP. (GP report, Section 5.2.1)
• The number of out-of-state visitors was overestimated - possibly by up to 40%. This reduced visitor expenditure, on our estimate, from $24.2m to $17.33m. (GP report, Section 5.2.1.)
• The EIA argued for an enhanced duration effect (whereby existing visitors extend their visit to attend the Grand Prix) without supporting evidence from survey data - this $4.4.m was eliminated from our estimate (GP report, Section 5.3).
• Estimated expenditure by retained Victorian visitors (visitors retained in Victoria who would otherwise have gone to Adelaide) was reduced from $10.6m to $5.89m - the supporting evidence provided by the EIA was unconvincing (GP report, Section 5.4).
• The EIA claimed an induced tourism effect of $6m. The EIA admitted that no evidence was available to support this conclusion - hence this amount was also not included in our estimate (GP report, Section 5.7).
• The EIA claimed a $9.9m expenditure impact from changes in savings patterns - ie. Victorians reduced their savings and permanently increased spending because of the Grand Prix. We considered this extremely unlikely, as insufficient supporting evidence was provided. Consequently, the amount was deleted from our analysis. (GP report, Section 5.8.)

3/ Missed Opportunities

The Victorian Government promotes the Grand Prix owing to its alleged economic benefits. Our analysis shows that the capital sunk into the Grand Prix could have been deployed in other uses which would have generated a bigger economic benefit. Significantly, world-renowned management consultant Kenichi Ohmae 1 comments that:

"politicians and bureaucrats push(ed) hard for major events because they were not willing to take day to day business events seriously, or because they did not understand the economy. 'They are excited about it: they get to meet big people. And yet the economy is more based on the day to day ins and outs of information, money, companies and people........'." 2

Our analysis of the Grand Prix supports Ohmae's comments. In other words, rigorous economic analysis cites increased wealth as the performance benchmark for choosing between projects. We noted that by our estimates, the Grand Prix would put only $22m of wealth (remaining asset value, profits from the Australian Grand Prix Corporation and other Victorian businesses) in Victorian pockets by 2005. This is a very poor performance. It may have been economically better for the Victorian Government to have invested in a dull, 'bread and butter' project, rather than a 'glamorous' Grand Prix.

If we accept the EIA at face value (which we do not), it estimates increased wealth of $240m. If, however, a comparable investment had been made in a Victorian company conducting a 'normal' business, it could be expected that a similar amount would be earned over ten years on the project alone, before we take into account the flow-on (or multiplier) benefits. Taking account of the flow-on benefits from a commercial project could increase profits by an additional amount - probably in the order of another $290m. A proper commercial investment may return $500m in wealth in the same period as the Grand Prix, while on the EIA's best estimates, the AFOGP can only muster $240m - or $22m on our estimates.

Economic benefits come from the 'day to day' bread and butter activities of good government. Thus, the Grand Prix should have been subjected to a rigorous cost-benefit analysis before being extensively subsidised by the Victorian taxpayers. It would appear - according to our calculations - that the Grand Prix is a major economic loser, relative to what Victorians could have achieved through other uses. If the Grand Prix is as good for the economy as the EIA claims, then those industries who are benefiting ought to be able to buy out the government share - at a price that gives a commercially viable return to the taxpayers' extensive investment.

Summary Table

Direct Economic Impacts (original & adjusted) from the Melbourne 1996 Grand Prix, ($m 1996 dollars). Note that data to the right of the decimal point can be affected by rounding errors.

Grand Prixtensions - Detailed Summary

"A peculiar thing about the Puddin' was that, though they had all had a great many slices of him, there was no sign of the place whence the slices had been cut. 'That's where the Magic comes in,' explained Bill. 'The more you eats the more you gets. Cut-an'-come-again is his name, an' cut, an' come again, is his nature. Me an' Sam has been eatin' away at this Puddin' for years, and there's not a mark on him. Perhaps,' he added, 'you would like to hear how we came to own this remarkable Puddin'.6 "

The AFOGP EIA:
Post-Event Rationalisation

In 1993, the Kennett Government in Victoria bought the rights to the Australian Formula One Grand Prix (AFOGP) from Adelaide, commandeered Albert Park for the building of the racetrack, and set the wheels in motion for an annual international event. All of this was well before an economic impact analysis of the Grand Prix was even commissioned. The subsequent Economic impact evaluation of the 1996 Transurban Australian Grand Prix (referred to in this document as the EIA) was released by the Victorian Government four months after the inaugural Grand Prix at Melbourne's Albert Park in 1996.

The Kennett Government hypothesis behind the annual Grand Prix was to create an international splash in order to generate a large economic benefit for Victoria. According to the Government and various spokespeople for the Australian Formula One Grand Prix, the EIA is "proof of the puddin' " that they're onto an economic winner that generates - and will continue to generate - substantial revenues for Victorian coffers.

Moreover, simply because we held the race, we gained an economic benefit to industry in the State of $95.6 million of extra expenditure. (Jeff Kennett, Victorian Parliamentary Hansard, 14 May 1996, Questions Without Notice, page 23.)

We have audited the Government's EIA to examine the accuracy of this claim. This EIA is important, because it provides the only evidence that their Grand Prix investment is economically beneficial for Victoria, and therefore an event that can be justified to the taxpayers.

The results of our analysis are contained in a report called Grand Prixtensions (GP). This section of the GP report provides only a detailed summary of the findings. The explanatory information can be found in the full version of the report, which can be obtained from the Save Albert Park Group, or by contacting Economist At Large and Associates 7 directly.

Significantly, world-renowned management consultant Kenichi Ohmae 8 comments that:

"politicians and bureaucrats push(ed) hard for major events because they were not willing to take day to day business events seriously, or because they did not understand the economy. They are excited about it: they get to meet big people. And yet the economy is more based on the day to day ins and outs of information, money, companies and people........."9

Caustic observations by management experts notwithstanding (!), our review of the EIA found the following:

Government claims -
based on wrong numbers

The economic impact analysis (EIA) for the 1996 AFOGP states that the Albert Park Grand Prix created a gross economic benefit of $95.6 million. The report, by its own reasoning, should have reported the net benefit estimated on page 62. Use of the gross estimate in the EIA's executive summary misleadingly overstates the economic benefit of the Grand Prix.

Page 62, Table 7.4 of the EIA, under the column headed 1996, reports that the net economic benefit figure is $46m (in 1990 dollars) - or $51.49m in 1996 dollars. This represents the first year impact in a three year cycle. Based on the data provided by the EIA, it would seem that the official analysis is implying that the average annual net economic benefit of the Grand Prix is in the order of $57.72m in 1996 dollars. By contrast, our estimates suggest that the likely outcome is of the order of $23.67m per annum - or lower.

The EIA calculation methodology used on page 62 is endorsed by normal economic practice. In other words, it is prescribed economic practice for the net economic benefit to be calculated, rather than the gross economic benefit. This prescribed economic methodology was advocated and discussed by the EIA report. Logically, citing the gross economic benefit from the EIA report - rather than the net economic benefit - amounts to changing the report outcomes. Government spokespeople citing the EIA's gross economic figure ($95.6m) - when they should be using the net economic figure($57.72m) - are in fact guilty of overstating the Grand Prix' economic benefit by about 40%.

The net benefit is the difference between the gross benefit created by the Grand Prix and the gross benefit that would have been created, had the opportunity cost projects been given the go-ahead instead. The opportunity cost projects are those investments which were cancelled in order to provide capital to finance the Grand Prix. (See GP report Section 6.3; also Summary table - at the end of this summary - Line numbers 9, 10, 11.)

Survey method
shows bad economic practice

The net economic benefit is estimated by surveying Grand Prix visitors and by calculating the number, and expenditure patterns, of international and interstate visitors.

The EIA does not describe its survey methodology. The integrity of the survey determines the integrity of the economic estimate. Without a transparent description of the survey methodology, we cannot be sure of the error estimates, or of the randomness or unbiased nature of the results. The EIA expects us to trust the survey manager. At the very least, it is bad economic practice not to reveal the survey methodology. (See GP report, section 5.)

Survey ignored
'stay-aways' and 'go-aways'

Moreover, the survey does not account for 'stay-aways' and 'go-aways' - people who avoided or left Victoria because of the AFOGP. Failure to include these people will artificially inflate the estimated benefits. Events such as the Grand Prix can lead to a 'repulsion' effect 10, whereby normal tourism is reduced. In Los Angeles, for example, tourism expenditure was reduced by $163m because of the repulsion effect from the 1984 Olympics 11. Yet there has been no attempt to measure this effect for the Australian Formula One Grand Prix - despite the evidence presented in the EIA which made the following statement:

While the conference was regarded as a success, interstate numbers were down compared to other years mainly due to a difficulty in obtaining accommodation. 12

This evidence is further supported by data from the Australian Bureau of Statistics which indicate a slow-down in the tourism growth rate for Melbourne in March 1996. Also in March 1996, there was an absolute fall in visitor numbers in the Melbourne CBD area. (See GP report, Section 5.1.)

On this basis, the estimated annual average net benefit of $57.72m could be overstated by an unknown amount. (See GP report, Section 6.3. See also Summary table line number 1. Our estimates of direct expenditure did not include 'stay-away' and 'go-away' effects, thus our data, in line number 1, is also likely to over-state the value of the direct expenditure.)

Key visitor numbers
are over-estimated

The estimate of 'bodies' attending the Grand Prix is 197,686. The source of this 'estimate' is not identified by the EIA consultants. The EIA report does even consider it necessary to describe the calculation methodology.

The survey-based visitor sample is used to indicate the proportion of interstate (I/s) and overseas (O/s) visitors within the overall attendees. If we assume that the EIA survey is correct - that is, random and unbiased (this is a source of great doubt) - then the EIA estimates that 16,916 of the I/s and O/s visitors were only there because of the Grand Prix. The largest proportion of the economic benefit of the Grand Prix comes from these additional visitors - who came only because of the AFOGP (i.e. AFOGP-dependent visitors). The EIA estimate of AFOGP-dependent visitors was achieved by averaging the difference between questions 25 and 26 in the survey. Unfortunately, Question 25 is not a reliable indicator of which I/s and O/s visitors were there simply because of the Grand Prix (See GP report Section 4.2). Question 25 asks: what was the main reason for visiting Melbourne? This question should have been phrased in a more rigorous manner: Would you have visited Melbourne in March 1996 if the Grand Prix were not held? The result of the 'woolly' nature of Question 25 is that it inflated visitor demand for the Grand Prix. Question 26 is somewhat better, and we have adjusted the data to cancel out some of the 'visitor inflation' caused by Question 25 (See GP report, Section 5.2).

Reworking the data, conservative estimates for I/s and O/s visitors suggest that they are in the order of 10,399 on one measure - or 14,060 on a different basis. (See GP report, Section 5.2.)

If there were only 10,399 AFOGP-dependent visitors, then the economic benefit could be reduced by up to 40%. We have estimated that the direct expenditure benefit of these visitors is likely to be closer to $17.33m or lower, rather than the claimed $24.9m. (See GP report, Section 5.2, also Summary Table Line no. 1.)

Key expenditure
effects not backed by evidence

The EIA report examines a number of areas to compile a list of economic benefits. Key elements are not supported with sufficient evidence or any evidence.

Enhanced duration effect:
no evidence gathered

The EIA report also includes an enhanced duration effect (worth 6% of the direct economic benefit) which should have been surveyed, but wasn't. The EIA instead relies on estimates from Adelaide. There is no explanation of why this figure was not surveyed, and hence we do not accept the estimate. (See GP report, Section 5.3, also Summary Table Line no. 2.)

Enhanced savings (resident expenditure) effect:
insufficient evidence

The EIA claimed also that there was an enhanced savings effect (reported in the EIA as the enhanced resident expenditure effect), because people changed their lifestyles as a result of the AFOGP. This alleged change in the Victorian lifestyle was worth 15% of the direct economic impact. Evidence of the change in lifestyle was not provided, and hence was also not acceptable. Evidence that savings were used was tendered. However, the key issue of savings increases either prior to, or after the event, was not covered. These may have offset the savings run-down and eliminated the claimed effect. (See GP report, Section 5.8, also Summary Table line no. 7.)

Induced Tourism effect:
no evidence!

Likewise, it is claimed that induced tourism would result in $6m in expenditure (worth 9% of the direct economic benefit). The report itself states that:

There is still no firm data available from the tourism research bodies on the impact of international exposure of Australian cities from major sporting events on induced tourism. 13

For this reason, we could not accept this figure either. Other figures have been reduced or rejected. These have been summarised in the table below. (See GP report, Section 5.7, also Summary Table Line no. 6.)

Retained Victorian expenditure
over-estimated

Estimated expenditure by retained Victorian visitors (visitors kept in Victoria who would otherwise have gone to Adelaide) has been reduced from $10.6m to $5.89m - supporting evidence provided by the EIA is unconvincing (GP report, Section 5.4, also Summary Table Line no 5).

$95.6m gross benefit expenditure
reduced to $43.93m

The EIA estimated a direct expenditure effect of $64.3m. The most credible figure that we could estimate was a direct expenditure of $29.55m - and even this could be reduced further by effects we have not been able to quantify. Effects that we have not been able to check include, for example, the multipliers used in the EIA. Instead, we have been forced to accept, uncritically, the EIA estimates of the relevant multipliers. The EIA applies multipliers to obtain a measure of the gross economic impact. Thus, the EIA estimates that $64.3m in direct economic benefit is transformed, via multipliers, to $95.6m in gross economic benefit. We estimate direct economic expenditure of $29.55m, which, after application of multipliers (supplied by the EIA), should provide a gross economic benefit estimate of $43.93m. (See GP report, Section 6.3, also Summary Table lines 9, 10 & 11.)

Net economic
benefit shrinks

Of course, the EIA claims that we should really look at the net economic impact. We have estimated that the claimed gross economic benefit of $95.6m implies an average net economic impact of $57.72m per year, based on EIA data. We have estimated the gross economic benefit to be $43.93m. As a result, the net economic benefit should become $23.67m - based on our analysis of the EIA data. (See GP report, Section 6.3, also Summary Table, lines 9, 10 & 11.)

The net benefit is equal to the gross benefit minus the benefits of the opportunity cost projects. Depending on what opportunity cost (foregone) projects are identified, the net benefit could shrink further to zero, or even become negative. The choice of the opportunity cost projects could overstate the estimated net benefit by a considerable margin.

AGPC operating
loss is about $5m

The Australian Grand Prix Corporation (as a distinct financial entity) is running at an operating loss. The EIA forecasts imply (on page 62) a loss (called a contingency) of approximately $4m per year - every year. The land cost has not been factored in at an accurate level, and is, in fact, a hidden subsidy to the race. Government tax payments are not known, and may have been waived, providing another hidden subsidy. Altogether, we estimated an operating loss of $5m in 1996, which blows out to $15.07m when estimated levels of depreciation (assumed to be $5.58m), government taxes (possibly $0.5m per year), and land rental (worth $4m in rent per annum) are taken into account. (See Table 8.4, Section 8; see Summary Table Line 13.)

Alternatives could make profits, cut
debt, cut taxes & boost tourism

The EIA framework relies on alternative projects to provide a comparison with the Grand Prix. The chosen alternative projects were an aerospace museum, roadworks and a cut in household taxes. It is claimed that these were foregone to enable the funding of the Grand Prix. Given the Government's aggressive commitment to economic growth, we envisaged that the real opportunity cost of such discretionary funds was other more economically beneficial projects, such as repaying government debt, cutting payroll tax (boosting industry), or advertising Victoria directly to overseas tourism markets.

Such alternative projects are critical to the overall scale of the net economic benefit. It is possible to imagine that if the Grand Prix capital had been used to repay debt and invest in industry, the Victorian economy would be much better off. Alternatively, some of the money could have been used in a trust fund to finance direct advertising of Victoria to international tourists.

The impact of international tourism advertising has been researched by the Australian Tourism Council 14. By contrast, claims that the Grand Prix provides cost-effective advertising benefits 15 are not supported by the EIA. No evidence is provided in the EIA to justify the claimed TV audience, nor the alleged flow-on benefit of induced tourism. Indeed, the EIA makes the claim that

There is still no firm data available from the tourism research bodies on the impact of international exposure of Australian cities from major sporting events on induced tourism.16

Minus 20% return
on investment

The losses of the AGPC create a loss of wealth (and hence jobs) for Victoria. This loss is in the order of -20% on combined EIA/AGPC estimates and -27% on our estimates. The AFOGP was supposed to be good for the economy, yet alternative investments like commercial projects earn upwards of +20% per year or even +8% in staid and safe Commonwealth Government bonds. The race fee (which is unknown) is likely to be far too high, and is probably undermining the viability of the event all on its own. (See GP report Table 8.6, Section 8; see also Summary Table Line 18, 19, 20.)

As a commercial deal, the AFOGP does not stand scrutiny. AGPC shareholders (the Victorian public) will be about $97.20m behind in ten years' time, based on EIA/AGPC data. On our figures, we estimate that the cumulative loss to the shareholders of the AGPC will be in the order of $152m based on 1996 financial accounts (see GP report Table 8.7, Section 8; see also GP report Summary Table Line 21). Of course, according to the EIA, some of the losses to the Victorian public as shareholders will be offset by the economic benefits estimated in the EIA. Thus the EIA would like us to believe that the combined net effect of the AGPC losses and the net economic benefits will make Victorian citizens better-off.

$500m vs $22m after 10yrs

In general, economic impact assessment methodology is flawed because it does not take account of the final accumulation in net wealth at the end of the ten year period, if different projects had been undertaken.

Economic impact assessment methodology normally estimates the increase in gross state product across an entire economy. Gross state product reflects the additional value created by a new enterprise directly, and through its multiplier benefits. This 'value-added' is the difference between the costs of inputs and the revenue received from sales.

Some of the 'value-added' is paid to employees as wages, while some is paid to the owners of capital as profit. It is the return on capital that determines the net increase wealth. The chosen investment option should be the project with the greatest net increase in wealth, given that the same amount of capital is invested in each project. Therefore, the appropriate test of any investment is the extent to which it increases wealth - relative to an alternative investment. The measure of investment effectiveness is the degree to which profits are increased. By applying an estimate of the profit component to the economic impact results, we can obtain an estimate of the likely profit increase earned in Victoria as a result of the Grand Prix. This places economic impact analysis on a sounder theoretical foundation, so long as the underlying assumptions are sustainable.

The summary table indicates (based on EIA data, and using generous assumptions about the profit share in the economy) that Victorians hold assets of $239m after ten years from the combined effect of the multiplier profits generated in the economy and the 'profits' generated by the AGPC. Our estimates suggest that because of a diminished direct expenditure impact and hence a diminished multiplier impact, as well as much higher operating losses, Victorians are only $21.87m ahead in assets after ten years of effort.

An equivalent commercial project, using EIA data, and earning a conservative return of 20% per year would have resulted in a net wealth position for Victorians of $230m after ten years - before multiplier induced profits are included. If the AFOGP can only create $239m after allowing for both the return on the AGPC and the multiplier profits, then the equivalent commercial project is clearly and unambiguously superior. If we had multiplier-induced profits on the scale of the EIA Grand Prix estimates, the net wealth position of the commercial project after ten years could be up to $500m. (See GP report Table 8.8 and Section 8.2; see also Summary Table Lines 22 to 25.)

In summary, the Grand Prix EIA suggests that Victorians could be $239m ahead after 10 years from direct and multiplier profits combined. We suggest that a more accurate estimate is $21.87m. However, if the capital had been invested in a commercial project, Victoria may well have accrued $500m in wealth over the same ten year period. The economic benefit would appear to be low, compared with what could have been - had the Government followed other strategies.

Victorians are worse off

To summarise, the Australian Formula One Grand Prix gives the appearance of providing major economic benefits. It seems more likely that the event causes (or is perceived to cause) congestion, which reduces the number of other visitors. It also appears that the report's estimates of overseas and interstate visitors are excessive.

We have concluded that the event is likely to be a net cost to Victorians, because Victorians' capital could have been invested elsewhere for a better return in terms of increased economic performance. In consequence, Victorians are likely to be considerably poorer as a result of the AFOGP.

Australians are poorer!

It is notable that our assessment tends to confirm the Industry Commission analysis of the Adelaide Grand Prix. The Productivity Commission (formerly the Industry Commission) concluded that the long-term impact of the Adelaide Grand Prix was to reduce total and per head real Australian economic output; i.e. make all Australians poorer 17. (See GP report Section 7.1.) The Victorian Grand Prix is on a bigger scale than the Adelaide Grand Prix. It is conceivable that had the IC model been applied to the Melbourne Grand Prix, the results would be similar, or worse.

Let the Winners
compensate the Losers

If the AFOGP created all the economic benefits claimed, then it could be expected that private industry would be willing to step forward to privatise the race, in order to secure the on-going flow of future benefits.

In theory at least, the winners (i.e. the industries making all the claimed profits) should be able to compensate Victorian taxpayers for their losses - perhaps via a bed tax! - and still come out ahead, and happy. We await developments with interest.

References

1.	Author of the 'Borderless World' and former head of McKinsey and Company.
2.	The Age, 21 November 1994, page 5, "A 'major events' economy doesn't work, says expert".
3.	AFOGP EIA (1996:46), Australian Formula One Grand Prix Economic Impact Assessment report published on behalf of the Department of State Development (Tourism Victoria), Melbourne, Australia, July 1996.
4.	AFOGP EIA (1996: vi)
5.	Adjusted data estimated by using the ratio from the output of the consultants' model.
6.	From The Magic Pudding, (c) Norman Lindsay, Angus and Robertson Pty Ltd, Sydney, 1971.
7.	Economist At Large and Associates - Ph 03 9562 4472, Fax 03 9562 4118, Email ecolarge@ozemail.com.au
8.	Author of the 'Borderless World' and former head of McKinsey and Company.
9.	The Age, 21 November 1994, page 5, 'A 'major events' economy doesn't work, says expert'.
10.	Leiper, N., (1996:6), Australian and New Zealand Tourism Professional, Summer 1996 edition, 'Olympics: An Alternative View'
11.	Crompton, J.L. and McKay, S.L., (1994:33-43), Festival Management & Event Tourism, Vol 2. p 33-43, Cognisant Comm. Corp., 'Measuring the Economic Impact of Festivals and Events: Some Myths, Misapplications and Ethical Dilemmas'. The authors are with Texas A&M University, Texas Agricultural Experiment Station. Department of Recreation, Park and Tourism Sciences.
12.	AFOGP EIA (1996:39)
13.	AFOGP EIA, (1996:45), EIA analysis.
14.	Australian Financial Review, 6 March 1997, page 5
15.	Age article, "Successful formula", March 27 1996.
16.	AFOGP EIA, (1996:45), EIA analysis.
17.	PC (July 1996:A7.21, Table A7.7.), Industry Commission now known as the Productivity Commission, Report on State, Territory and local Government Assistance to Industry, Draft Report, July 1996.

Economist At Large and Associates

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