The Sydney Olympics, seven years on: an ex-post dynamic CGE assessment
AbstractA 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.
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Bibliographic InfoPaper provided by Monash University, Centre of Policy Studies/IMPACT Centre in its series Centre of Policy Studies/IMPACT Centre Working Papers with number g-168.
Date of creation: Sep 2007
Date of revision:
Publication status: Published in 'Modelling the economic impacts of the Sydney Olympics in retrospect: Game over for the bonanza story?', Economic Papers, Vol. 30(2), June 2011, pp. 218-232.
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Olympics economic impact; major projects; regional dynamic CGE;
Find related papers by 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-11-24 (All new papers)
- NEP-CMP-2007-11-24 (Computational Economics)
- NEP-PPM-2007-11-24 (Project, Program & Portfolio Management)
- NEP-TUR-2007-11-24 (Tourism Economics)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- S'HANNO DA FARE LE OLIMPIADI A ROMA NEL 2020?
by Lawrence Bartolomucci in La Voce on 2012-01-31 12:00:00
- Terence C. Mills & Peter Dawson & Paul Downward, 2013. "Olympic news and attitudes towards the Olympics: A compositional time-series analysis of how sentiment is affected by events," University of East Anglia Applied and Financial Economics Working Paper Series 046, School of Economics, University of East Anglia, Norwich, UK..
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