Modelling the Economic Impacts of the Sydney Olympics in Retrospect - Game Over for the Bonanza Story?*

Abstract

Do the large economic benefits predicted for Olympics host countries actually materialise? We re‐examine the Sydney 2000 Olympics via historical modelling with a multiregional dynamic computable general equilibrium model, taking care to avoid sources of overestimation, such as elastic factor supply assumptions; failure to treat public inputs as costs; and overestimation of foreign tourism demand impacts. We first conduct a simulation from 1997/1998 to 2005/2006 to construct a base case and to assess the extent of Olympics‐induced awareness of Australia on tourism demand. Our historical simulation results which are driven by observed values for economic variables, including tourism statistics, do not provide support for the presence of induced tourism. We then conduct a simulation for a no‐Sydney Olympics counterfactual and find that the Olympics generated a real consumption loss of $2.1 billion. We do identify economic winners from the Games and consider the possibility of non‐use benefits from the Games offsetting the real consumption loss.

Assessing the Olympic Games: The Economic Impact and Beyond

“…Furthermore, their structure is complex, and though more reliable than I‐O models, CGEs are not immune from the risk of over‐optimistic estimates of benefits. Giesecke and Madden ( and ) find three sources of this risk: failure to treat public inputs as costs; elastic factor supply assumptions; and overestimation of foreign demand impacts by including the expenditure deriving from induced tourism.…”

“…The study estimated regression coefficients for the Games, which did not prove to be statistically significant. Giesecke and Madden (, ) assessed the economic impact of the Sydney Olympics by conducting an ex post analysis based on a dynamic CGE model. In 1995 and 2002, Brunet conducted two descriptive ex post analyses which sought to summarize the impact of the Barcelona 1992 Olympics from a number of different points of view (costs incurred, sources of finance, urban transformation, employment, etc.…”

Economic Impacts of Visa Restrictions on Tourism: A Case of Two Events in China

“…The economic impact of an event is attributed mainly to an increase in tourism spending from tourists, organizers, delegates, sponsors and others (Dwyer, Forsyth, & Spurr, 2005). There is a rich literature on the evaluation of economic consequences and impacts of special events, especially sporting events (see Daniels, Norman, & Henry, 2004;Gelan, 2003;Giesecke & Madden, 2011;Hotchkiss, Moore, & Zobay, 2003;Kim, Gursoy, & Lee, 2006;Lee & Taylor, 2005;Li et al, 2011). Although most of these studies have shown large positive economic consequences generated by special events, several have shown that special events have negative economic impacts.…”

“…The economic consequences of inbound tourism during a one-off event may be attributed to factors such as exchange rate changes, bad weather, inflation, and social instability. Many studies have evaluated the economic influences of tourism due to such one-off events as foot and mouth disease (Irvine & Anderson, 2005), terrorist attacks (Arana & Leon, 2008;Eugenio-Martin et al, 2005;Pizam & Smith, 2000), economic crises (Okumus, Altinay, & Arasli, 2005;Smeral, 2010;Song & Lin, 2010) and sporting events (Giesecke & Madden, 2011;Li, Blake, & Cooper, 2011). Researchers have also identified the factors that may influence the demand for tourism and have evaluated their economic consequences.…”

Does stadium construction create jobs and boost incomes? The realised economic impacts of sports facilities in New Zealand

“…Over NZ$1.1 billion (0.06% of New Zealand's nominal GDP between 1997 and 2009) has been spent on sports facilities in New Zealand over the past 15 years, with the public sector contributing 63% of this amount (NZ$698.7 million). The New Zealand experience with respect to facility construction is mirrored in the United States (Crompton, Howard, & Var, 2003;Zimbalist & Long, 2006), as well as countries in Europe (Jones, 2002;Newman & Tual, 2002;Rebeggiani, 2006;van Dam, 2000) and Australia (Giesecke & Madden, 2011;Searle, 2002), among other countries. There has been increased scrutiny of the increasing government involvement in the financing of sports facilities over time.…”