Economic Aspects and the Summer Olympics: A Review of
the Related Research
The author would like to gratefully acknowledge and thank Prof. John Hudson, Dr.
Peter Dawson, Adam George-Wood, Nikos Veraros, Martha McIntosh for their helpful
comments on earlier drafts of this paper. Special thanks also to two anonymous referees
who provided substantial and constructive comments.
Finally, the author would like to
acknowledge the Manpower Employment Organisation in Athens, Greece for helping
fund this research. Any remaining errors or omissions are the author's alone.
As the Summer Olympics are growing with larger media coverage and sponsorship,
host cities have started to attach great importance to the tourism and other likely
economic effects occurred by staging such a special event. As a result, a number of
studies have been conducted to consider the various economic implications on the hosts.
This paper examines and evaluates methods and assumptions employed by the
economic studies. It also compares ex-ante models and forecasts with the ex-post
The aim is to improve the information available to policy makers and
potential future hosts of Summer Olympics and other mega-events.
Keywords: Mega-events; Summer Olympics; Economic Impact Analysis
The modern Olympic Games were first held in Athens in 1896. Over the years, the
Games survived many trials including wars and boycotts, and each set of Games is held
every four years. In recent years, the interest of countries and regions in staging a future
edition of the Games has grown because of the perception that doing so would help
attract tourists and generate income.
As well as the likely impacts on the socio-cultural and environmental areas, host cities
place great emphasis on the economic implications of the Olympics and the tourism
development. These implications have received increasing attention over the last two
decades, involving economic studies to provide a measure of the net gains which
hosting the Games may provide.
While economic impact analyses prepared by or on
behalf of Olympic advocates have demonstrated economic advantages from hosting the
Games, potential host communities pose the question of whether, in fact, the economic
benefits of the Olympics are pragmatic and, if they are, the extent to which such
benefits offset the costs (Haxton, 1999).
Much of the published literature of the Olympics emphasises long-term benefits such as
newly constructed event facilities and infrastructure, urban revival, enhanced
international reputation, increased tourism, as well as improved public welfare,
additional employment, local business opportunities and corporate relocation (Ritchie
and Aitken, 1985; Hall, 1987; Kang, 1988; Robin, 1988; Walle, 1996; French and
Disher, 1997). In contrast, potential negative impacts include high construction costs of
public sports infrastructure and related necessary investments (usually putting a heavy