The Peaks and Troughs of Olympic Anticipation
Charting an emotional path through the ups and downs of anticipation toward the next Olympic Games.
The scary thought creeps into your mind on little cat feet one night as you’re lying awake contemplating both the impending global economic conflagration and your own recent 12-page Visa bill. What if the Olympics aren’t, after all, the fiscal angel of mercy that you’ve always believed? What if your faith that the Olympics will boost the local economy – and by extension your small part in it – falls into the same category of economic thinking as the frat-boy entrepreneurial plan? This plan posits that, Hey, let’s throw a party at our communal house. We’ll decorate it in a theme and invite everyone we know but charge money for people to get in and charge for the drinks – and we’ll make a killing.</p>
Video streeters: How do you feel about the Olympics coming to town?
Webby: Are recent host cities glad they held the Games?
Incredibly, people do pay to get in and to drink, as the plan envisioned. But then, by the time the frat boys subtract the cost of the liquor, the disco ball, the flyer photocopying bill, all the stuff that Brad thought they needed for the World of Warcraft theme to make the place look more cool and the repair bill generated after one of the guests set fire to the front porch, well, it turns out they’ve actually lost money. No, this is just middle-of-the-night thinking, you tell yourself.
The Olympics are not a 20-something’s party with no real likelihood of an economic payoff. You’re sure they’re not. But then, you wonder, how would you know? If you Google the word “Olympics” and the phrase “economic benefits,” you will come up with 145,000 hits. The information that pops up in just the first few pages covers the waterfront. There’s that glowing press release from the B.C. government back on Jan. 16, 2002, that portrayed the Olympics as a kind of tsunami of cash that would hit the province:
FORT ST. JOHN – A winning bid for Vancouver/Whistler to host the 2010 Winter Olympics and Paralympic Games, combined with an expanded convention centre in Vancouver, could generate $5.7 billion to $10 billion in direct economic activity, a study by the Ministry of Competition, Science and Enterprise indicates. The Games and expanded centre would also create an estimated 118,000 to 228,000 direct and indirect jobs across the province, plus $1.3 billion to $2.5 billion in total tax revenues, in addition to other major benefits, such as permanent community and sports legacies. On the other end, there is this article from the Fall 2005 The Industrial Geographer (one of those niche academic journals that usually runs articles on land prices in Japan or the structural dynamics of the pharmaceutical industry). In it, economics professor Jeffrey Owen states fairly unequivocally: Cities who host the Olympic Games must commit to significant investments in sports venues and other infrastructure. It is commonly assumed that the scale of such an event and the scale of the preparation for it will create large and lasting economic benefits to the host city. Economic impact studies confirm these expectations by forecasting economic benefits in the billions of dollars. Unfortunately these studies are filled with misapplications of economic theory that virtually guarantee their projections will be large. Ex-post studies have consistently found no evidence of positive economic impacts from mega-sporting events even remotely approaching the estimates in economic impact studies.
Among those 145,000 hits, there is also everything in between. There are studies of the impact of various sporting events, not just the Olympics. There are statements from residents and officials from past Olympic cities swearing that their lives took a permanent turn for the better after being touched by the Games. Or that they didn’t change at all. Or that it depended on how aggressively local governments marketed their cities or countries in relation to the Olympics. Or that the city was going to boom anyway, with or without the Games. There are whole books weighing the evidence and concluding that it’s all very complicated. In essence, what the proliferation of studies and articles tell us is this: You don’t know jack and never will. What you are about to read will not help you sort through any of that information or confirm that you have correctly assessed the situation. But it will help you understand the psychology behind your conviction that the Olympics are great or that they’re terrible or that they’re a wash. It will also help you understand that, no matter what happens in the next two years, you are likely to hang on to that opinion.
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