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The Sydney Olympics, seven years on: an ex-post dynamic CGE assessment

Author

Listed:
  • James A Giesecke
  • John R Madden
Abstract
A recent development in ex-ante analysis of mega events is the use of computable general equilibrium (CGE) models. CGE models improve greatly on the input-output model, which they have largely displaced, since they incorporate fixed factors and substitution effects. However, like input-output, the method is still subject to the risk of over-optimistic estimation of benefits. We see three sources of such risk: (i) failure to treat public inputs as costs; (ii) elastic factor supply assumptions; and (iii) overestimation of foreign demand shocks via inclusion of "induced tourism" expenditure. In this paper, we undertake an ex-post analysis of the Olympics that addresses each of these risks. We handle the first two directly: public services used to support the Games (such as security services) are treated as Games-specific inputs, and we model the national labour market in full employment. For the third risk, we undertake an historical simulation to uncover the extent, if any, of induced tourism. We find no evidence of an induced tourism effect, and so exclude it from our analysis. With these assumptions, we find the Sydney Olympics generated a net consumption loss of approximately $2.1 billion.

Suggested Citation

  • James A Giesecke & John R Madden, 2007. "The Sydney Olympics, seven years on: an ex-post dynamic CGE assessment," Centre of Policy Studies/IMPACT Centre Working Papers g-168, Victoria University, Centre of Policy Studies/IMPACT Centre.
    • Handle: RePEc:cop:wpaper:g-168
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Boston Nabs U.S. Olympics Nomination. Sucks to Be Boston.
      by Jim Pagels in Hit & Run blog on 2015-01-10 01:36:00
    2. S'HANNO DA FARE LE OLIMPIADI A ROMA NEL 2020?
      by Lawrence Bartolomucci in La Voce on 2012-01-31 18:00:00

    Citations

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    Cited by:

    1. John K. Wilson & Richard Pomfret, 2009. "Government Subsidies for Professional Team Sports in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 42(3), pages 264-275, September.
    2. Dolan, Paul & Kavetsos, Georgios & Krekel, Christian & Mavridis, Dimitris & Metcalfe, Robert & Senik, Claudia & Szymanski, Stefan & Ziebarth, Nicolas R., 2019. "Quantifying the intangible impact of the Olympics using subjective well-being data," Journal of Public Economics, Elsevier, vol. 177(C), pages 1-1.
    3. Martina Lubyová & Miroslav Štefánik & Pavol Baboš & Daniel Gerbery & Veronika Hvozdíková & Katarína Karasová & Ivan Lichner & Tomáš Miklošovic & Marek Radvanský & Eva Rublíková & Ivana Studená, . "Labour Market in Slovakia 2017+," Books, Institute of Economic Research, Slovak Academy of Sciences, edition 1, number 003.
    4. Tien Duc Pham & Son Nghiem & Larry Dwyer, 2018. "The economic impacts of a changing visa fee for Chinese tourists to Australia," Tourism Economics, , vol. 24(1), pages 109-126, February.
    5. MASSIANI, Jérôme, 2022. "Computable General Equilibrium assessment of mega-events: Issues and possible solutions," Journal of Policy Modeling, Elsevier, vol. 44(5), pages 920-942.
    6. Peter Dawson & Paul Downward & Terence C. Mills, 2014. "Olympic news and attitudes towards the Olympics: a compositional time-series analysis of how sentiment is affected by events," Journal of Applied Statistics, Taylor & Francis Journals, vol. 41(6), pages 1307-1314, June.
    7. Dolan, Paul & Kavetsos, Georgios & Krekel, Christian & Mavridis, Dimitris & Metcalfe, Robert & Senik, Claudia & Szymanski, Stefan & Ziebarth, Nicolas R., 2016. "The host with the most? The effects of the Olympic Games on happiness," LSE Research Online Documents on Economics 67677, London School of Economics and Political Science, LSE Library.
    8. Richard Pomfret & John K. Wilson, 2011. "The Peculiar Economics of Government Policy towards Sport," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 18(1), pages 85-100.
    9. Kasimati, Evangelia & Dawson, Peter, 2009. "Assessing the impact of the 2004 Olympic Games on the Greek economy: A small macroeconometric model," Economic Modelling, Elsevier, vol. 26(1), pages 139-146, January.
    10. Pasquale Lucio Scandizzo & Maria Rita Pierleoni, 2018. "Assessing The Olympic Games: The Economic Impact And Beyond," Journal of Economic Surveys, Wiley Blackwell, vol. 32(3), pages 649-682, July.
    11. Massiani, Jérôme, 2018. "Assessing the economic impact of mega events using Computable General Equilibrium models: Promises and compromises," Economic Modelling, Elsevier, vol. 75(C), pages 1-9.
    12. Massiani, Jerome, 2019. "CGE Analysis of Mega Events: A Timely Issue," Conference papers 333109, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    13. Julie Clark & Ade Kearns, 2016. "Going for gold: A prospective assessment of the economic impacts of the Commonwealth Games 2014 on the East End of Glasgow," Environment and Planning C, , vol. 34(8), pages 1474-1500, December.
    14. Shina Li & Adam Blake & Chris Cooper, 2011. "Modelling the Economic Impact of International Tourism on the Chinese Economy: A CGE Analysis of the Beijing 2008 Olympics," Tourism Economics, , vol. 17(2), pages 279-303, April.
    15. Heather Mitchell & Mark Fergusson Stewart, 2015. "What should you pay to host a party? An economic analysis of hosting sports mega-events," Applied Economics, Taylor & Francis Journals, vol. 47(15), pages 1550-1561, March.
    16. Li, ShiNa & Blake, Adam & Thomas, Rhodri, 2013. "Modelling the economic impact of sports events: The case of the Beijing Olympics," Economic Modelling, Elsevier, vol. 30(C), pages 235-244.
    17. Massiani, Jérôme, 2015. "How much will this event benefit our economy? A checklist for Economic Impact Assessment and application to Milan 2015 International Exhibition," MPRA Paper 68976, University Library of Munich, Germany, revised Oct 2015.
    18. Hui Wang & Peng Ju & Honggang Xu & Donna Wong, 2019. "Are Grassroots Sports Events Good for Migrant Cities’ Sustainable Development? A Case Study of the Shenzhen 100 km Hikathon," Sustainability, MDPI, vol. 11(1), pages 1-16, January.
    19. John K. Wilson & Richard Pomfret, 2014. "Public Policy and Professional Sports," Books, Edward Elgar Publishing, number 15381.

    More about this item

    Keywords

    Olympics economic impact; major projects; regional dynamic CGE;
    All these keywords.

    JEL classification:

    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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