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

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.