The Economics of Sport
  • Sports Economics
  • About
  • Workshop
  • Selected Publications
  • Book Reviews
  • A Primer on Gaelic Games
  • Upcoming Events
  • Media
  • Education
  • Resources & Links
  • Data

The Greatest Olympic Legacy in the World, Ever!!

28/7/2014

 
By Paul O'Sullivan
Picture
Watching Sky Sports News one morning recently, I briefly caught sight of a headline (accompanying SSN report is available here) that said something along the lines of ‘London Olympics gave £15bn boost to UK economy in 2013’ (the official figure is £14.2bn). My initial reaction was ‘Hmmm, that seems quite high’,especially when one considers that the direct cost of hosting the Olympics was over £9bn.
 
The figure provided by Sky came from “Inspired by 2012: The legacy from the Olympic and Paralympic Games: Second annual report”, a joint report by the UK Government and Mayor of London.  Since the London Games in 2012, people like Boris Johnson and Seb Coe have proclaimed how great, and important, such a legacy is, irrespective of (or maybe because of) how much the Olympics cost or whether people in the UK even want, or care about, such a legacy.

On page 47 of the report, the £14.2bn is broken down into three sections: (i) £5.9bn of additional sales by UK companies as a result of UKTI (UK Trade & Investment) activity; (ii) £3.58bn of Olympic-related High Value  Opportunities (HVO) won overseas; (iii) £4.72bn of additional foreign direct investment into the UK. 
 
Little evidence is provided to back up points (i) and (iii). For instance, the £4.72bn of additional foreign direct investment into the UK is described as being ‘influenced by the Games’. With regard to (ii), the report states that the UKTI has targeted ‘the hosts of future major sports events’ and ‘global infrastructure opportunities’ and outlines some successes of UK companies wining various contracts. However, the report makes no attempt to quantify how much of these success were solely, or partly, due to hosting the Olympics. The implication seems to be that none of these contracts would have been won had London not hosted the Games.  

One gets the sense from the report that any benefits to the UK economy since 2012 are being attributed to hosting the Olympics, possibly to convince the public that hosting the Games was worth the £9bn price tag. Usually, benefits are determined by comparing an outcome in 2013 to the equivalent outcome in 2012. As well as this, it does not seem to be considered that an outcome may have occurred if the Games had not taken place, i.e. the ‘counter-factual’.  
 
For example, the report states on page 54 that “London welcomed 16.8 million international visitors in 2013,....an increase of 1.3 million visitors”. An impressive achievement of 8.56% growth!  However, a look at www.visitbritain.org shows that international visitors to London grew by 3.5% in 2010, 4% in 2011 but only by 1.1% in 2012. The lower growth in 2012 may be indicative of ‘crowding out’ and‘time-switching’ effects. While it is possible that the Olympics had some effect on tourism in 2013, it is hardly likely to explain all of the growth, much as some vested interests would like that to be the case.
 
Similarly, the report states, again on p54, that “Many leading institutions, including the British Museum, Natural History Museum and National Gallery, experienced large increases in visitor numbers in 2013”. Again, the implication is that hosting the Olympics drove this change. However, according to this article, Summer 2012 was one of the worst years on record for some major visitor attractions in London. While poor weather was a factor, it is also likely that a ‘substitution effect’ was relevant as visitors simply substituted Olympic activities for ‘normal’ tourism activities. Hence, a return to ‘business as usual’ conditions would give a relatively large level of growth.
 
There are numerous examples of only looking at the 2012-2013 effect, or of failing to try to take account of a‘counter-factual’ in the drive to paint the Olympics as having massive long-term benefits. While it is likely that the Olympics had some effect, extravagant claims made by politicians should always be viewed with an appropriate level of scepticism. 


Comments are closed.

    Archives

    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013

    About

    This website was founded in July 2013.

    RSS Feed

    Categories

    All
    American Football
    Athletics
    Baseball
    Basketball
    Behavioural Economics
    Boxing
    Broadcasting
    Competitive Balance
    Cricket
    Cycling
    Darts
    David Butler
    Declan Jordan
    Drugs
    Ed Valentine
    Epl
    Esports
    Expenditure
    F1
    Fifa World Cup
    Finances
    Funding
    Gaa
    Gaelic Games
    Gambling
    Game Theory
    Gary Burns
    Geography
    Golf
    Greyhound Racing
    Guest Posts
    Horse Racing
    Impact Studies
    John Considine
    John Eakins
    League Of Ireland
    Location
    Media
    Mls
    Mma
    Olympics
    Participation
    Paul O'Sullivan
    Premier League
    Regulation
    Research
    Robbie Butler
    Rugby
    Simpsonomics
    Snooker
    Soccer
    Spatial Analysis
    Sporting Bodies
    Stephen Brosnan
    Swimming
    Taxation
    Teaching
    Technology
    Tennis
    Transfers
    Uefa
    Ufc
    World Cup
    Wwe

Related

The website is not formally affiliated to any institution and all of the entries represent the personal views and opinions of an individual contributor. The website operates on a not-for-profit basis. For this reason we decline all advertisement opportunities. 

Contact

To contact us email sportseconomics2013@gmail.com or find us on Twitter @SportEcon.