An examination of the determinants of Irish household sports expenditures and the effects of the economic recession

ABSTRACT: Research question: This study examines the determinants of four household sport expenditure items. The primary objective is to examine the effects of the recent economic recession in Ireland on these expenditures. This study is the first to analyse Irish household sport expenditure data and the first to study the effects of the economic recession on these items. Research methods: Data from the 2004/2005 and 2009/2010 Irish Household Budget Surveys, a period which covers the economic recession in Ireland, are employed. A Tobit model is estimated as each of the four sports expenditures has a large amount of zero expenditures. Results and findings: The social and economic characteristics of Irish households affect each sports item in differing ways. The presence of children of a particular age appears to be a strong determinant of spending on categories of sports which involve more physical activity (sport participation and leisure fees). Other categories of sports are influenced more by income (attendance at sporting events) and age and social status (club subscriptions). For some categories of sport spending there is a strong link with how the economy is performing, whereas for others household characteristics play just as important a role. Implications: This research has shown that sport is a multi-faceted product. Its determinants and how it is affected by economic downturns depends on the type of expenditure examined. For spending on certain categories the recession has had a clear negative effect, whereas for others it has been neutral. These are important considerations for sports managers and policy-makers when devising their strategies.