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What should you pay to host a party? An economic analysis of hosting sports mega-events

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  • Heather Mitchell
  • Mark Fergusson Stewart

Abstract

Governments all over the world put huge amounts of money into bidding for, and then hosting, sports events like Football's World Cup or the Olympic Games. They also give money to professional sports teams and other mega-events to encourage them to locate within a particular constituency. This article examines the statistical relationship between tourism and three Football World Cups and five Olympic Games, finding very little positive effect. Given this conclusion, the article looks at why governments continue to bid for these competitions. It presents evidence that shows that these sports contests make people happy, and argues that politicians capitalize on this feel-good factor; harnessing the hubris associated with these events for political gain. The article then contends that the best way to reduce the politics associated with bidding for mega-events is to allocate them via an auction, rather than the wasteful rent-seeking methods that are currently used.

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  • 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.
    • Handle: RePEc:taf:applec:v:47:y:2015:i:15:p:1550-1561
    DOI: 10.1080/00036846.2014.1000522
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    Cited by:

    1. Ine Hugaerts & Holger Schunk & Thomas Könecke, 2023. "Environmental Sustainability as Factor for Mega Sport Event Support—Empirical Evidence Regarding the Olympic Games and the Football World Cup," World, MDPI, vol. 4(3), pages 1-13, July.
    2. Rolfe, John, 2019. "Simple economic frameworks to evaluate public investments in sporting events in regional Australia," Economic Analysis and Policy, Elsevier, vol. 63(C), pages 35-43.
    3. Douglas Barrios & Stuart Russell & Matt Andrews, 2016. "Bringing Home the Gold? A Review of the Economic Impact of Hosting Mega-Events," Growth Lab Working Papers 78, Harvard's Growth Lab.
    4. Tobias Streicher & Sascha L. Schmidt & Dominik Schreyer & Benno Torgler, 2017. "Is it the economy, stupid? The role of social versus economic factors in people’s support for hosting the Olympic Games: evidence from 12 democratic countries," Applied Economics Letters, Taylor & Francis Journals, vol. 24(3), pages 170-174, February.
    5. Stefan Szymanski & Bastien Drut, 2020. "The Private Benefit of Public Funding: The FIFA World Cup, UEFA European Championship, and Attendance at Host Country League Soccer," Journal of Sports Economics, , vol. 21(7), pages 723-745, October.
    6. Anna Laura Mancini & Giulio Papini, 2021. "All that glitters is not gold. An economic evaluation of the Turin Winter Olympics," Temi di discussione (Economic working papers) 1355, Bank of Italy, Economic Research and International Relations Area.
    7. Ogawa, Ryoh, 2017. "Using REIT Data to Assess the Economic Worth of Mega-Events: The Case of the 2020 Tokyo Olympics," MPRA Paper 78829, University Library of Munich, Germany.
    8. Michał Marcin Kobierecki & Michał Pierzgalski, 2022. "Sports Mega-Events and Economic Growth: A Synthetic Control Approach," Journal of Sports Economics, , vol. 23(5), pages 567-597, June.
    9. Olmos, Lorena & Bellido, Héctor & Román-Aso, Juan A., 2020. "The effects of mega-events on perceived corruption," European Journal of Political Economy, Elsevier, vol. 61(C).
    10. Saulius Sukys & Daiva Majauskiene & Diana Karanauskiene & Ilona Tilindiene, 2022. "Adaptation and Validation of the Lithuanian-Language Version of the Olympic Value Scale (OVS)," IJERPH, MDPI, vol. 19(7), pages 1-12, April.
    11. Jérôme Massiani, 2020. "Towards Improved Guidelines for Cost–Benefit Analysis of Sport and Cultural Events," Economic Papers, The Economic Society of Australia, vol. 39(3), pages 270-289, September.
    12. Refai, Hisham Al & Eissa, Mohamed Abdelaziz, 2017. "The impact of FIFA’s official announcements on the stock market of Qatar: The case of the 2022 World Cup," Research in International Business and Finance, Elsevier, vol. 41(C), pages 347-353.
    13. Andrews, Matt & Harrington, Peter, 2016. "Off Pitch: Football's Financial Integrity Weaknesses, and How to Strengthen Them," Working Paper Series 16-009, Harvard University, John F. Kennedy School of Government.

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