Thursday, August 2, 2012

2/8/2012: A bit of an Olympic bubble?

Hosting Olympics is considered to be a great boost to the economy and yield long term benefits from infrastructure investments, branding of the host city etc. Right?

Here's a study (link):

"Summer Olympics bring hundreds of thousands of visitors and generate upward of $10 billion in spending for the host city. This large influx of tourism dollars is only part of the overall impact of hosting the Olympic Games. In order to host the visitors and sporting events, cities must make sizable investments in infrastructure such as airports, arenas, and highways. 

Additionally, the publicity and international exposure of a host city may benefit international trade and capital flows. 

Proponents argue that this investment will pay off through increased economic growth, but research confirming these claims is lacking. 

This paper examines whether hosting an Olympiad improves a city's longterm growth. 

In order to control for the selfselection of cities that host Olympic Games, this paper matches Olympic host cities with cities that were finalists for the Olympic Games, but were not selected by the International Olympic Committee. A differenceindifference estimator examines postOlympic impacts for host cities between 1950 and 2005. 

Regression results provide no longterm impacts of hosting an Olympics on two measures of population, real Gross Domestic Product per capita and trade openness."

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