The butterfly effect, before it was a movie starring Ashton Kutcher, was a theory. A butterfly flapping its wings in the Strait of Juan de Fuca, it held, could in time cause a typhoon in Japan. The idea is propelled by the power of pure, abstract math: by the mysterious collusion of exponents and amplification, a tiny input can cause a dramatic output.
The idea, which in its economic guise takes the name “multiplier effect,” is familiar to British Columbians, who have for years been sold on the supposed benefits of large public projects. One cruise ship in a Vancouver port, for example, is said to be worth $2 million in economic activity. The new Vancouver Convention Centre will reportedly generate $2 billion in spinoff revenue. And, of course, the 2010 Vancouver Olympics: in 2002 Premier Campbell said they'd be worth $10 billion in economic benefit, an estimate he's since revised to $4 billion.
Are these figures verifiable? The question, according to UBC behavioural economist Marc-David Seidel, is beside the point. “When people start making multiplier-effect projections, you have to take a hard look at who it is and what their motivations are,” he says.
Enter the Vancouver fireworks, an event sponsors say costs $4 million and conveys $40 million in economic benefits to the city. Formerly the Benson & Hedges Symphony of Fire, English Bay’s annual summertime pyrotechnic extravaganza changed title sponsors in 1990, when federal regulations forbidding tobacco advertising came into force. And before the Keg stepped in this past March to help the event cover a $500,000 budget shortfall, the event, for the first time in its 28-year history, was cancelled.
There came an outpouring of sentiment. “I’m heartbroken!” cried Angelica, a 12-year-old commenter to vancouversun.com. “These beautiful fireworks make Vancouver one of the best cities in the world!”
Dr. Z, another commenter, was more circumspect. “Good!” he said. “When will us thick-headed humans realize that pouring carcinogens into our air is a celebration of stupidity and superficiality?”
The opinions of squeaky wheels aside, how do we make an accurate account of what big public events cost us and what they’re worth? Seidel says the question is fearsomely difficult to answer. Why? Because making projections using the multiplier effect is an exercise in pure speculation, and so inevitably falls prey to the motives of the speculator.
Admire the fireworks, and you’re likely to talk about how much more the restaurants, tour operators and convenience stores will make during the event. Detest the fireworks, and you’ll focus on the litter and policing costs, to say nothing of the ghastly pollution.
Can we put an actual number to the results? “Always distrust the politicians,” says Seidel. “But you can do all right averaging the utopian and dystopian fantasies together.”
