Estimation of direct net effects of events

Abstract

We provide three estimation strategies for the estimation of direct net effects of events and the respective substitution effects based on a quantitative model. We apply the strategies to estimate the effect of fairs on overnight stays in Basel. We show that deseasonalizing by year day fixed effects is superior to month and week fixed effects and semi-parametric deseasonalizing. We find that fairs increase the overnight stays in nights during fairs by 17% and by 8% and 4% in the preceding nights. The net effect of fairs on overnight events is only one fourth of the gross effect. These results demonstrate that the distinction between net and gross effects is crucial also for the estimation of direct effects of events. The study therefore contributes to the literature on the estimation of economic effects of events which recently has focused on this distinction for indirect effects. It also contributes to the theoretical an empirical literature of event tourism in cities.