NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Olympic Effect

Andrew K. Rose, Mark M. Spiegel

NBER Working Paper No. 14854
Issued in April 2009
NBER Program(s):   IFM   ITI   PE

Economists are skeptical about the economic benefits of hosting "mega-events" such as the Olympic Games or the World Cup, since such activities have considerable cost and seem to yield few tangible benefits. These doubts are rarely shared by policy-makers and the population, who are typically quite enthusiastic about such spectacles. In this paper, we reconcile these positions by examining the economic impact of hosting mega-events like the Olympics; we focus on trade. Using a variety of trade models, we show that hosting a mega-event like the Olympics has a positive impact on national exports. This effect is statistically robust, permanent, and large; trade is around 30% higher for countries that have hosted the Olympics. Interestingly however, we also find that unsuccessful bids to host the Olympics have a similar positive impact on exports. We conclude that the Olympic effect on trade is attributable to the signal a country sends when bidding to host the games, rather than the act of actually holding a mega-event. We develop a political economy model that formalizes this idea, and derives the conditions under which a signal like this is used by countries wishing to liberalize.

download in pdf format
   (286 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w14854

Published: Andrew K. Rose & Mark M. Spiegel, 2011. "The Olympic Effect," Economic Journal, Royal Economic Society, vol. 121(553), pages 652-677, 06. citation courtesy of

Users who downloaded this paper also downloaded* these:
Rosen and Sanderson w7573 Labor Markets in Professional Sports
Becker Crime and Punishment: An Economic Approach
Bernard and Busse w7998 Who Wins the Olympic Games: Economic Development and Medal Totals
Chen, Jin, Kumar, and Shi w16907 The Promise of Beijing: Evaluating the Impact of the 2008 Olympic Games on Air Quality
Borjas w9755 The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us