SHOULD CITIES GO FOR THE GOLD? THE LONG-TERM IMPACTS OF HOSTING THE OLYMPICS

Authors

  • STEPHEN B. BILLINGS,

    1. Billings: Assistant Professor, Department of Political Science & Public Administration, and Research Fellow, Belk Center for Real Estate, University of North Carolina-Charlotte, Charlotte, NC 28223-0001. Phone 704-687-3497, Fax 704-687-3497, E-mail stephen.billings@uncc.edu
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  • J. SCOTT HOLLADAY

    1. Holladay: Economics Fellow, Institute for Policy Integrity, New York University School of Law, New York, NY 10012. E-mail james.holladay@nyu.edu
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    • Thanks to seminar participants at University of North Carolina-Charlotte, the 2009 Urban Affairs Association Conference, the 2008 North American Regional Science Conference, two anonymous referees, and the editor who provided valuable feedback for this paper.


Abstract

The 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 long-term growth. In order to control for the self-selection 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 difference-in-difference estimator examines post-Olympic impacts for host cities between 1950 and 2005. Regression results provide no long-term impacts of hosting an Olympics on two measures of population, real Gross Domestic Product per capita and trade openness. (JEL O18, R11)

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