Economic Aspects and the Summer Olympics: a Review of Related Research
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INTERNATIONAL JOURNAL OF TOURISM RESEARCH
Int. J. Tourism Res. 5, 433–444 (2003)
Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/jtr.449
Economic Aspects and the Summer
Olympics: a Review of Related Research
Evangelia Kasimati*
Department of Economics and International Development, University of Bath, Claverton Down, Bath BA2
7AY, UK
ABSTRACT including wars and boycotts, and each set of
Games is held every 4 years. In recent years,
As the Summer Olympics are growing with the interest of countries and regions in staging
larger media coverage and sponsorship, host a future edition of the Games has grown
cities have started to attach great importance because of the perception that doing so would
to the tourism and other likely economic help attract tourists and generate income.
effects that occur by staging such a special As well as the likely impacts on the socio-cul-
event. As a result, a number of studies have tural and environmental areas, host cities place
been conducted to consider the various great emphasis on the economic implications of
economic implications on the hosts. This the Olympics and the tourism development.
paper examines and evaluates methods and These implications have received increasing
assumptions used by the economic studies. attention over the past two decades, involving
It also compares ex-ante models and economic studies to provide a measure of the
forecasts with the ex-post approach. The net gains that hosting the Games may provide.
aim is to improve the information available Although economic impact analyses prepared
to policy makers and potential future hosts by or on behalf of Olympic advocates have
of Summer Olympics and other mega- demonstrated economic advantages from
events. Copyright © 2003 John Wiley & hosting the Games, potential host communities
Sons, Ltd. pose the question of whether, in fact, the eco-
nomic benefits of the Olympics are pragmatic
and, if they are, the extent to which such bene-
Received 14 October 2002; Revised 8 August 2003; Accepted
23 August 2003 fits offset the costs (Haxton, 1999).
Much of the published literature on the
Olympics emphasises long-term benefits such
Keywords: mega-events; Summer Olympics; as newly constructed event facilities and infra-
economic impact analysis. structure, urban revival, enhanced interna-
tional reputation, increased tourism, as well as
INTRODUCTION improved public welfare, additional employ-
ment, local business opportunities and corpo-
T
he modern Olympic Games were first rate relocation (Ritchie and Aitken, 1985; Hall,
held in Athens in 1896. Over the years, 1987; Kang, 1988; Robin, 1988; Walle, 1996;
the Games have survived many trials, French and Disher, 1997). In contrast, potential
negative impacts include high construction
costs of public sports infrastructure and related
*Correspondence to: E. Kasimati, Department of necessary investments (usually placing a
Economics and International Development, University of
Bath, Claverton Down, Bath BA2 7AY, UK. heavy burden on the government budget),
E-mail: E.Kasimati@bath.ac.uk temporary crowding problems, loss of visitors,
Copyright © 2003 John Wiley & Sons, Ltd.434 E. Kasimati
property rental increases and temporary taries as well as non-area travellers who would
increases in employment and business activi- be defined as ‘tourists’ by those in the tourism
ties (Hiller, 1990; Darcy and Veal, 1994; Mount business.
and Leroux, 1994; Leiper, 1997; Spilling, 1998). There has been a tendency to assess the eco-
The objective here is to review existing liter- nomic impact of Summer Olympics using the
ature that focuses on the economic impacts of ‘multiplier’ concept. Briefly, a multiplier esti-
the Summer Olympic the Games. No economic mates the number of times a unit of currency,
impact studies were found for Games before once spent within an economy, is respent
Los Angeles in 1984. Seven cases of the modern within the borders of that economy. The
Games are examined, dated between 1984 and overall effect of the new money on the
2012. Thirteen studies are considered that local/regional/national economy is broken
investigate various economic variables related down into three major elements.
to the hosting of the Games and they have been
(1) Direct effect: the first economic effect of the
categorised into ex-ante and ex-post economic
new money spent by outside visitors. As
impact assessments.
Figure 1 illustrates, new money is injected
This review does not attempt to draw any
into the host economy in industries such as
conclusion as to which Games have the most
accommodation, food, transportation, etc.
favourable economic impacts. This would
(2) Indirect effect: the subsequent effects of the
require a comprehensive study involving the
injected money within the economy, after
review, comparison and justification of the
allowing for leakages.
models from both theoretical and empirical
(3) Induced effect: the proportion of house-
standpoints. Instead, our implicit objective is
hold income then respent in other busi-
more modest. The goal is primarily to provide
nesses in the economy.
an overview and evaluation of the different
approaches and demonstrate the differences The indirect and induced effects together are
that may appear in the results. collectively referred to as secondary impact
The remainder of this article is organised (Crompton, 1995).
as follows. It begins by explaining the link The multiplier analysis has been a common
between direct, indirect and induced economic form of estimating the respending impact of an
effects, which is the principal theory embraced initial inflow of money in an economy. Adopt-
by economic impact studies. It then goes on to ing this approach, if errors occurred in esti-
examine the alternative modelling approaches mating the direct effect then those errors of
taken to ascertain the economic implications calculation are compounded in estimating the
generated by the Summer Olympics. Finally, secondary effect. Therefore, an accurate calcu-
the article analyses each study in turn, evalu- lation of the direct spending is essential in
ates the assumptions made and outlines direc- order for the economic impact estimates to be
tions for further research. reliable (Baade and Matheson, 2002).
The three most commonly reported multipli-
UNDERSTANDING THE OVERALL ers are those of sales, income and employment
ECONOMIC EFFECT (Crompton, 1995). Sales or Transactions multipli-
ers measure the direct and secondary effect of
When a city is awarded the Summer Olympics, the injected money on the business activity and
a large amount of new money is expected to turnover. Household Income multipliers concen-
flow into the host economy and recirculate trate on the direct and secondary effects on the
within it. An economic effect through hosting household income. Employment multipliers
the Games arises because an inflow of funds, measure the number of new full-time jobs res-
which have not been switched from elsewhere ulting from the money injected in the economy.
in the economy and probably would not oth- Although the sales multiplier is the one most
erwise have come without the Games, will often used in the economic impact studies,
enter the local, regional or national economy. Crompton (1995) argues that the household
This inflow of money stems from broadcasters, income multiplier is the most relevant for
sponsors, Olympic family, athletes and digni- assessing the economic impact of hosting a
Copyright © 2003 John Wiley & Sons, Ltd. Int. J. Tourism Res. 5, 433–444 (2003)Economic Aspects and the Summer Olympics 435
New Money
Injected into
Food Accommodation
Transport Games tickets
a. b. c.
d. DIRECT
Inter-industry purchases Direct household Government
Leakages EFFECT
within the economy income revenue
Household purchases Household purchases
Savings
within the economy outside the economy
ALL BUSINESSES
a. b. c.
d. INDIRECT
Inter-industry purchases Secondary household Government
Leakages EFFECT
within the economy income revenue
Household purchases Household purchases
Savings
within the economy outside the economy
Figure 1. Schematic diagram of the ‘multiplier’ approach, based on Liu and Var (1982) and Crompton (1995).
‘Accommodation’ is chosen to show how the multiplier concept operates, but should be similarly imple-
mented for ‘food’, ‘transport’ and ‘Games tickets’. The three direct recipients of the injected money, after
allowing for leakages, subsequently spend this money in the same four ways, generating the indirect effect.
Leakages occur because some money could be spent outside the host economy. Moreover, some of the house-
hold income could leak out of the economy by the purchase of products from outside, or would not stimu-
late economic activity because it was invested in savings.
sport event. The reason for this is because it ticularly for ‘one-time’ mega-sports events
focuses particularly on the effect of the injected such as the Summer Olympic Games. The
money on residents’ income and their standard short duration of the Games does not neces-
of living. In other words, the host community sarily justify the hiring of new employees, the
is not interested in knowing how many sales generation of permanent full-time jobs and
are attributable to the hosting of the Summer the sustainability of the employment effects.
Olympics, but rather what proportion of these Entrepreneurs will probably exhaust other
sales will end up as residents’ income. alternatives such as asking existing employees
In contrast, the employment multipliers are to work overtime or perform other tasks,
the least reliable among the others (Fletcher before hiring additional work force to satisfy
and Snee, 1989; Crompton, 1995). Their basic the temporary high demand (Crompton, 1995).
assumption of full utilisation of existing A short review of the literature reveals that
employees may creates errors in calculating the multiplier is a particularly contentious
the increase in the level of employment, par- measure. A study by Hunter (1988, p. 16)
Copyright © 2003 John Wiley & Sons, Ltd. Int. J. Tourism Res. 5, 433–444 (2003)436 E. Kasimati
argues that ‘economic impact studies based on final demand, indirect tax rates or commodity
multipliers are quite clearly an improper tool price shocks (West, 1995). However, projec-
for legislative decision-making’. In contrast, tions normally are made by specifying final
Crompton (1995, p. 34) comments that despite demands (consumption, investment, exports
its shortcomings, this technique can be valu- and imports) exogenously. Intermediate con-
able ‘if it is implemented knowledgeably and sumption, prices and income are determined
with integrity’. with strict identities. Consequently, there is no
In event economic studies, problems usually integration between final demand and prices
arise when researchers do not clearly identify or income and no guarantee that there will be
what type of multiplier (sales or income) is economic consistency among, for example,
used in their methodological approach, and as consumption, prices and income (Werling,
a result misleading conclusions can be derived 1992). Moreover, attempts to build ‘dynamic’
from the data. Because sales multipliers I–O models by endogenising investment based
include higher numbers compared with on the capital equipment ‘requirements’ for
income multipliers, they tend to be attractive future output often lead to severe instability
tools for advocates of sport events to use in problems (Almon, 1966; Steenge, 1990).
their attempt to justify the economic benefits of Studies that adopted the I–O analysis to
hosting the events (Crompton, 1995). In addi- evaluate the total economic impact of hosting
tion, misapplication of the data may arise a mega sporting event made use of linear
when spending generated by local residents or assumptions. They calculated a set of multipli-
which occurred outside is included in the ers suggesting particular proportions of con-
overall economic effect. Furthermore, it is suming the inputs and used them intact,
crucial to exclude both spending by tourists regardless of the scale of the injected funds and
who rescheduled a previously organised trip the surge in the economic activity. As a result,
to coincide with the Games or by those who they failed to take into account economies of
visit the host for other reasons but also end up scale, production close to full capacity and
attending from an economic impact study price adaptations to demand changes. Ignor-
(Howard and Crompton, 1995). ing these factors tended to result in miscalcu-
lating the multiplier values.
TYPES OF MODELLING APPROACH The shortcomings described above apply to
the regional input–output modelling system
In order for economists to identify and quan- (RIMS II), a computer program often used by
tify the economic consequences of hosting an studies examined the Summer Olympics in the
event, such as the Summer Olympic Games, USA. The RIMS II has been proven to be suc-
a modelling approach must be adopted. In cessful for measuring effects at several levels
the published literature examined, two main of industrial aggregation, when initial tourist
approaches have been used under the broad spending is known, but fails to examine the
label of the input–output (I–O) and the effect on nearby areas, because it is a single-
computable general equilibrium (CGE) region model (Humphreys and Plummer,
framework. 1995). An alternative I–O computer program,
The I–O method is a long-established tech- also developed in the USA, is IMPLAN
nique originated by Leontief in the 1940s and (IMpact analysis for PLANning).
since then it has been very widely applied in Although a comparatively large number of
economics. Classic I–O models are structured the referenced economic studies have been
around input–output tables and their produc- carried out in an I–O framework (see Table 1),
tion or price categories, but make little or no studies of the Sydney Olympics turned
use of regression-based behavioural equations. towards the use of CGE models. The CGE
The disaggregation of classic I–O models is frameworks are disaggregated representations
limited by the disaggregation of the published of the economy, which use input–output struc-
input–output table. As these models account ture for the production side of the economy.
for intermediate exchanges, they are useful for The CGE models include sectoral-level pro-
assessing industry level impacts for changes in duction functions and disaggregated demand
Copyright © 2003 John Wiley & Sons, Ltd. Int. J. Tourism Res. 5, 433–444 (2003)Table 1. Economic Impact Studies of the Summer Olympic Games (1984–2012)a
State/country Host/bid city Year Reference Analysis Type of approach
District of Columbia Washington–Baltimore bid 2012 Fuller and Clinch, 2000 Ex-ante I–O (IMPLAN)
Texas Houston bid Airola and Craig, 2000 Ex-ante I–O (RIMS II)
Copyright © 2003 John Wiley & Sons, Ltd.
Greece Athens 2004 Balfousia-Savva et al., 2001 Ex-ante Macroeconometric
Papanikos, 1999 Ex-ante Multiplier
Economic Aspects and the Summer Olympics
Australia Sydney 2000 Arthur Andersen, 1999 Ex-ante CGE (MMRF)
NSW Treasury, 1997 Ex-ante CGE (MMRF)
KPMG Peat Marwick, 1993 Ex-ante I–O
Georgia Atlanta 1996 Baade and Matheson, 2002 Ex-post Econometric
Humphreys and Plummer, 1995 Ex-ante I–O (RIMS II)
Spain Barcelona 1992 Brunet, 1995 Ex-ante No modelling
Brunet, 1993 Ex-ante No modelling
South Korea Seoul 1988 Kim et al., 1989 Ex-ante No modelling
California Los Angeles 1984 Economics Research Associates, 1984 Ex-ante I–O (RIMS II)
a
Apart from the official reports, no economic impact studies were found for Moscow (1980), Montreal (1976), Munich (1972), Mexico City (1968), Tokyo (1964), Rome
(1960) and Melbourne (1956).
Int. J. Tourism Res. 5, 433–444 (2003)
437438 E. Kasimati functions for consumption, imports, invest- In the case of I–O analysis the assumption ment, etc. They combine input–output struc- that the I–O coefficients remain unchanged or ture and behavioural functions. Normally, can be extrapolated into the future in a reliable however, behavioural parameters are not manner is of particular importance. This is still estimated with regression analysis but are more so when the I–O model is being used to deduced from the single year’s set of data or analyse the impact of major structural changes specified exogenously (Werling, 1992). In the or shocks such as that of hosting a mega sport- determination of prices, CGE models assume ing event. The import coefficients have par- flexible prices that move to clear all the ticular relevance in this case. A further markets simultaneously (although some CGE consideration, pertinent perhaps to all forms of models will assume some sticky prices, such as analysis, is differentiating between the short- in the labour market). term and the long-term impact of hosting the Earlier CGE models were used to estimate Games. For example, the examination of the different static equilibriums under Walrasian extent to which the employment generated is general equilibrium theory. Most contempo- sustainable in the long run. From the short rary CGE models have been expanded to overview, however, it is our understanding incorporate dynamic adjustment. The MMRF that the I–O model has been comparatively (Monash multi-regional forecasting) model, more popular, because it might be cost effec- used by Australian studies to measure the tive and simple in comparison with CGE economic impact of the Sydney Olympics, is an models. example of a dynamic CGE model. The MMRF used the so-called ‘bottoms-up’ EX-ANTE AND EX-POST ECONOMIC approach. A number of regional economic IMPACT ASSESSMENTS models are included and then are linked using interregional flows of commodities, factors of The importance of the relationship between production and population. The bottoms-up tourism and the Summer Olympics has gained approach allows the modelling of economic increased recognition in recent years. The agents’ behaviour at the regional level and tourism effect is one among several that bid then their aggregation is attempted. Although and host cities seek, arguing that the interna- MMRF explicitly distinguishes the economies tional media coverage preceding and during of Australia’s eight states and territories and the Games presents a tremendous opportu- generates results for all regions in a steady nity to advertise themselves in the global multiregional accounting framework, its size marketplace. limitation hinders the application of a similar In an attempt to assess the likely growth in model to larger countries compared with tourism as well as other economic effects, Australia. ex-ante assessments have been carried out to Owing to vague technical details often forecast the impacts of the Summer Olympics. found in the economic studies, a deep pene- Table 1 shows that a number of ex-ante eco- tration proved to be a difficult task. The eco- nomic analyses have been conducted, but the nomic models rely on assumptions that reduce research significantly lacks ex-post impact the economy to a level of simplicity so that it assessments. An ex-post analysis examines the can be analysed. Each technique is subject to economic situation of the geographical influ- its own limitations defined by its assumptions. ence zone before and after the event and Most of the theoretical assumptions used in manages to isolate the event from other factors MMRF, such as perfect competition in product that may run at the same time and may have markets, zero pure profits and constant returns contributed to the economic impact (Baade to scale production functions, labour market and Matheson, 2002). equilibrium, are not always valid for the The majority of studies listed in Table 1 were Australian States. It is therefore important to commissioned by proponents of the Olympic consider whether these assumptions may have process, and the reader must bear in mind that a significant impact on the Games modelling the report writers were potentially motivated results. to come up with a favourable result (Baade and Copyright © 2003 John Wiley & Sons, Ltd. Int. J. Tourism Res. 5, 433–444 (2003)
Economic Aspects and the Summer Olympics 439
Matheson, 2002). This interpretation could involved, and Hiller (1999) has discussed the
more likely be the case when reports were pre- strategy used by Cape Town in its bid to host
pared to justify an Olympic bid. A good way the 2004 Olympic Games. Further dimensions
to provide some balance to these views would of the bidding process, however, have been
be to read economic impact studies prepared revealed by assertions of bribery and corrup-
by ‘anti-Olympics’ groups, but there are none tion. Books such as ‘Lords of the Rings’
currently available. There is, however, a (Simson and Jennings, 1992) and ‘New Lords
growing non-affiliated literature that can be of the Rings’ (Jennings, 1996) criticised inten-
used as a counterweight. sively the legitimacy of the bidding process,
For example, the anti-Olympic alliances claiming that IOC members corruptly
‘Bread not Circuses’ (BNC) and ‘People Inge- requested bribes and accepted generous gifts
niously Subverting the Sydney Olympic Farce’ from potential host cities in return for their
(PISSOFF), based in Toronto and Sydney votes. In addition, the Salt Lake scandal further
respectively, made use of the Internet to emphasised the need to address such problems
promote their Olympic critique (current (McIntosh, 2000) and virtually prompted a
addresses are www.breadnotcircuses.org and revamping of the IOC’s rules with respect to
www.cat.org.au/pissoff). The main argument the host-city bidding process.
of BNC was that the public money spent for The review will now analyse the studies
the Games would be taken from other more mentioned in Table 1 with reference to a spe-
important sectors (e.g. education, health, envi- cific question: What are the economic implica-
ronment, prosperity). Now with almost every tions of the Summer Games on the host?
potential Olympic city’s bid there tends to be Three studies commissioned for the Sydney
the creation of an anti-Olympic alliance such Olympics predicted the event would generate
as the recent example from Vancouver’s bid substantial extra revenue for Australia, and
for the 2010 Winter Games. In the case of New South Wales (NSW) in particular. Table 2
Vancouver, ‘The Impact of the Olympics on shows the predictions made by each study.
Community Coalition’ (IOCC) defines itself as Although KPMG Peat Marwick (1993)
a community watchdog rather than an anti- adopted a different modelling approach, its
Olympic group and aims to ensure that the figures broadly concurred with those released
environmental, social, economic and civil by Andersen (1999) and NSW Treasury (1997).
rights issues remain outstanding and the The I–O framework used in the study by
Olympic benefits apply to everybody. KPMG Peat Marwick (1993) ignored supply-
On the other side, the bidding process itself side constraints and therefore made its
has gained attention. In his book, Hill (1996) estimates questionable. More specifically,
described the experience of the unsuccessful supply-side constraints such as investment
bids by Birmingham and Manchester to host crowding out, price increases owing to
the 1992 and 2000 Olympic Games respec- resource scarcity and public financing of infra-
tively, focusing especially on the politics structure expenditures are of great importance
Table 2. Sydney Games impact summaries. Sources: KPMG, 1993; NSW Treasury, 1997; Andersen, 1999
Projected figures Andersena NSW Treasurya KPMGb
Sponsor of analysis Sydney OOC NSW Treasury Sydney Bid Committee
Addition to Australian GDP A$6.5 billion A$6.4 billion A$7.3 billion
Addition to NSW’s GDP A$5.1 billion A$6.3 billion A$4.6 billion
International arrivals in Australia 1.5 million 2.3 million 1.3 million
Additional tourist spending A$2.7 billion A$4.3 billion A$3.0 billion
New Jobs (Australia) 90 000 98 700 156 198
Period 1994–2006 1994–2006 1991–2004
a
1996 values.
b
1992 values.
Copyright © 2003 John Wiley & Sons, Ltd. Int. J. Tourism Res. 5, 433–444 (2003)440 E. Kasimati in the study of the Summer Olympics and plier is likely to be. It is noteworthy to mention the consulting firm should take this into that difficulties were experienced in providing consideration. a further evaluation of the Balfousia-Savva et Investigating the tourism impacts of the al. (2001) model as there are few published Games, Andersen (1999) and NSW Treasury details relating to its theoretical structure. (1997) gave little consideration to the likely Other ex-ante studies that have looked at the loss of visitors as a result of hosting the 2000 economic impact of Summer Olympic Games Games. This subject is of particular interest in are those of Brunet (1993, 1995) and Kim et al. light of the argument put forward by Leiper (1989). Quantifiable data describing expendi- (1997), which mentions that although mega- tures, contracts, jobs, investments and tourism events such as the Summer Olympics may were based almost exclusively on secondary encourage new tourists, the holiday-makers, research and the studies did not provide any business travellers or even local residents will predictions using a form of modelling. Rather be diverted elsewhere to escape expected dis- they were more theoretical in their approach turbances and congestion problems. aiming to identify and collate evidence of the A number of ex-ante studies are also available economic benefits of the Barcelona and South for the next Summer Olympics, which will be Korea Games respectively. It is our under- taking place in 2004 in Athens, Greece; pro- standing that the studies were conducted with minent amongst these are the studies by a view to capturing and aggregating disparate Balfousia-Savva et al. (2001) and Papanikos pieces of evidence regarding the economic (1999). Balfousia-Savva et al. (2001) had the activities flowing from the conduct of the advantage of utilising the most recent estimates Games. of the direct impacts of the Games (Table 3), An attempt to offer an ex-post economic including updated estimates for the Olympics impact analysis of the Summer Olympics was budget. However, scepticism is raised regard- made by Baade and Matheson (2002). Their ing data estimates related to the level of aim was to assess changes in employment in induced tourism, total Olympic construction Los Angeles and Atlanta that were attributable expenditures and Olympics operating profits. to the staging of the 1984 and 1996 Olympics Despite major methodological differences respectively. In other words, their ex-post between the studies by Papanikos (1999) and approach was targeted to estimate the level of Balfousia-Savva et al. (2001), their results do employment in the Games’ absence. To achieve not differ significantly, with both suggesting this, they constructed an econometric equation growth in tourism and revenue. The macro- including as independent variables those of econometric model utilised in the Balfousia- population, real per capita personal income, Savva et al. (2001) study implied different wages, taxes as well as dummy variables for scenarios in macroeconomic settings, but failed the occurrence of the Olympics and the oil to take into account possible resource con- boom. Using standard regression analysis straints. On the other hand, Papanikos ‘bor- techniques, Baade and Matheson (2002) found rowed’ the value of multipliers from other that the coefficient for the Olympics variable studies in related cities. This probably hap- was insignificant. The econometric equation pened because the direct estimation of the was then used to estimate changes in employ- value could be both complicated and costly. ment and isolated the contribution of the However, it might affect his results, because Games by comparing this estimated value with economic relationships may be different the actual employment levels. between communities. Both studies make pre- Their results for employment growth were dictions on a national level and lack an explicit more divergent by far than those released by spatial dimension in assessing the impact of ex-ante studies of Economic Research Associ- the Games. The choice of the nation as a refer- ates (1984) and Humphreys and Plummer ence area is doubtful, because as Howard and (1995) and have brought to light possible over- Crompton (1995) illustrated, the larger the estimation reported by the latter studies. assessed area, the smaller the leakages that are Another key finding was that the economy vir- likely to happen and then the larger the multi- tually returned to its ‘normal’ pattern after- Copyright © 2003 John Wiley & Sons, Ltd. Int. J. Tourism Res. 5, 433–444 (2003)
Table 3. Summer Olympics impact summaries
Summer Olympics Sponsor of analysis Reference Total economic Tourists New jobs Period
impact
Washington– Greater Baltimore Fuller and Clinch, 2000 US$5.3 billiona 1.3 million 69 758 2012
Baltimore Alliance/Committee Washington–
bid, 2012 Greater Washington Baltimore
Board of Trade/ metropolitan area
Initiative
Houston bid, 2012 None Airola and Craig, 2000 US$4.3 billiona 0.8 million 64 216 2012
Houston
Copyright © 2003 John Wiley & Sons, Ltd.
metropolitan area
Athens, 2004 Centre of Planning and Balfousia-Savva et al., GRD 2850 billiona 4.8 million 300 400 2000–2010
Economic Research 2001 (medium scenario) Greece
Economic Aspects and the Summer Olympics
Greek Hotel Chamber’s Papanikos, 1999 US$15.9 billionb 5.9 million 445 000 1998–2011
Tourism Research (medium scenario) Greece
Institute
Atlanta, 1996 None Baade and Matheson, Not examined Not examined 42 448 1994–1996
2002 State of Georgia
Atlanta OOC Humphreys and US$5.1 billionc 1.1 million 77 026 1991–1997
Plummer, 1995 State of Georgia
Barcelona, 1992 Supreme Sports Council Brunet, 1993, 1995 US$0.03 billion 0.4 million 296 640 1987–1992
of Spanish Government/ Spain
Olympic and Sports
Studies Centre
Seoul, 1988 Seoul OOC Kim et al., 1989 WON 1846.2 billion n.a. 336 000 1982–1988
(income effect only) South Korea
Los Angeles, 1984 None Baade and Matheson, Not examined Not examined 5043 1984
2002 Los Angeles
Los Angeles OOC Economics Research US$2.3 billiond 0.6 million 73 375 1984
Associate, 1984 Southern California
a
2000 values.
b
1999 values.
c
1994 values.
d
1984 values.
Int. J. Tourism Res. 5, 433–444 (2003)
441442 E. Kasimati
wards and any increase in economic activity sible alternative projects; however, some
attributable to the Games was temporary. important opportunity cost elements can be
However, Baade and Matheson’s (2002) con- investigated further (Kesenne, 1999).
clusions rest heavily on the model being cor- In addition, another aspect to be considered
rectly specified, which invites one to wonder in subsequent research is the potential eco-
how sensitive these results are to alternative nomic retreat after the completion of the
specifications. Games. When the level of income and invest-
Covering the period of 1984 through to 2012, ment falls after the event, then the multiplier
all the ex-ante economic studies indicate the also follows. To illustrate this point, findings
significant role of the Summer Olympic Games from broader mega-event literature could be
in the promotion of the host economy. They utilised to demonstrate that ‘one-time’ events
highlighted the extension of the Games eco- have no lasting post-event effects in new busi-
nomic impact well beyond the actual period of ness activities or employment (Mount and
the event occurrence itself. Economic growth, Leroux, 1994; Spilling, 1998).
increased tourism and additional employment It is important, therefore, that prospective
were some of their major findings. researchers be inspired by a recognition of the
However, the high expectations released by shortcomings found in earlier ex-ante and ex-
most of them could be considered to be poten- post studies and that they concentrate on areas
tially biased, because the ambition of those that most need the effort. This will help plan-
commissioning the studies is to favour the ners and potential hosts of mega-events to
hosting of the Games. This issue has received improve their forecasting and decisions.
a great deal of attention from scholars investi-
gating the Games and other mega-events
(Mills, 1993; Crompton, 1995; Howard and ACKNOWLEDGEMENTS
Crompton, 1995; Kesenne, 1999; Porter, 1999;
Preuss, 2000; Baade and Matheson, 2002). Nev- The author would like to gratefully acknowl-
ertheless, it is our opinion that if the estimation edge and thank Professor John Hudson, Dr
process is made transparent, then the findings Peter Dawson, Adam George-Wood, Nikos
are reliable. Taking into account the strengths Veraros and Martha McIntosh for their helpful
and weaknesses of all the methods and tech- comments on earlier drafts of this paper.
niques used, the discussion here shows that ex- Special thanks also to two anonymous referees
ante models and forecasts were not confirmed who provided substantial and constructive
by ex-post analyses and this therefore prompts comments. Finally, the author would like to
the need for improved theory. acknowledge the Manpower Employment
Research in this field needs to further con- Organisation in Athens, Greece for helping
sider a substantial element, which is the oppor- fund this research. Any remaining errors or
tunity cost involved in hosting the Summer omissions are the author’s alone.
Olympic Games or other mega-events. Host
communities often pose the question of
whether financing the Games is the most effec- REFERENCES
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