The Economic Impact of the Olympics

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The Economic Impact of the Olympics

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• When the Olympic flame is lit, China will be
  hoping for a 17-day festival of sport and
  international friendship. It sees the games as
  marking not just its re-emergence as a global
  economic force but also as a country that the
  rest of the world treatswith admiration and
  respect. Economist, August 2, 2008

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Projected Benefits of Hosting the Olympics

• National Reputation
• Job Creation
• Visitor Spending
• Tourism Development
• Investment in Infrastructure and Transport Links

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Ex-post studies conclusion

• large costs that are not nearly compensated by
  neither the revenues earned during the event nor
  the legacy

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Misapplication

• Treating Costs as Benefits
• Ignoring Opportunity Costs
• Using Gross Spending Instead of Net Changes
• Using Too Large Multipliers

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Olympic Legacy

• Positive Publicity
• Increased Tourism
• Increasing Productive Capacity
• Attraction of Business

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Resources Andrew K. Rose and Mark M. Spiegel
(2009).The Olympic Effect. http//www.frbsf.org/ec
onomics/pbc/seminars/Rose20090324.pdf.   Baade,
R. A., and V. Matheson (2002). Bidding for the
Olympics Fools Gold?. http//www.holycross.edu/d
epartments/economics/vmatheso/research/olympics.pd
f.   Hefner, Frank L. 1990. Using Economic
Models to Measure the Impact of Sports on Local
Economies. Journal of Sport and Social Issues
141-13. http//www.springerlink.com/content/n2520
7230u8v478g/fulltext.pdf?page1.   Owen, Jeffrey
G. (2005). Estimating the Cost and Benefit of
Hosting Olympic Games What Can Beijing Expect
from Its 2008 Games?. http//findarticles.com/p/ar
ticles/mi_qa4127/is_200510/ai_n15705690/?tagconte
ntcol1.  
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• Thank you for your attention