Monday, August 13, 2012

The Olympics

Well, I must admit I got caught up in the euphoria - I spent many moments when I ought to have been being more productive checking the latest medals for Team GB, and refreshing on the tickets website, and as an economist that leads me to think a little about the economic impact of the 30th Olympiad that have just finished here in the UK, in London to be most precise.

Can we ever measure it? Can we say that the net economic benefit was x million pounds? The BBC have tried today to enter into the debate, pointing out not just the basics (e.g. we built stadia which created jobs), but also the subtleties - how many tourists were put off coming to the UK because of the Olympics? How many Brits holidayed abroad to avoid the games? How much productivity was lost as Brits checked up on the BBC website how many golds we'd won? Did we do it more than the French, the Americans, the Irish, etc?

Then, how do we measure the "feel-good factor" which undeniably was created by the games? It was wonderful to walk through London and Hyde Park last week and experience the vibrant atmosphere, but what, if any, was the actual benefit of that? As happier people will we become more productive, have better ideas and be creative in the workplace?

Of course, a response can be that this doesn't really matter - why should we always be so bothered about the economic benefit of something like this? Of course, the bottom line is that we have all had to pay for it, one way or another, through either the tax system or in other ways, such as funds that might otherwise have been spent on local services in the regions rather than London and the games. So given we all had to pay for it, we ought to be thinking about whether it was good value or not.

Most likely, on paper, the games won't turn a profit - but that's mainly because things like the feel-good factor can't be measured. There's little doubt that while economists remain, in general, negative on the impact of such large events, the general Joe Bloggs remains unabashedly positive, and many would dearly love the next Olympics to be in London too...

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