Economists and public policy analysts have studied the economic impact of large international sporting events like the World Cup and the Olympics, and national events like the Super Bowl, and the evidence shows that there is very little in the way of economic benefit from hosting these events. Incomes don’t grow faster, more jobs aren’t created, governments don’t rake in significant hauls of new tax revenues. In other words, the best evidence produced by disinterested researchers is that the economic value of hosting the World Cup or Olympics is not especially large.My reasoning: I'd like to watch a world-class soccer match without flying to another continent. Virtually no one celebrating after the World Cup bids are handed out is doing so thinking, Wow, South Africa/Brazil/Russia/Qatar is going to make lots of money off this, and incomes are going rise and there's going to be a bundle of cash. They are thinking, There's going to be a hell of a party right around the corner, and I just might be able to see Lio Messi net a golazo from a few hundred feet away. Or in economicese, the utility derived from the event far outweighs my share of whatever gain the US has scored by losing out to Qatar.
So, congratulations to Russia and Qatar. I wish you well as you organize the World Cups in 2018 and 2022. I hope for your sakes that the victory you have today time does not reveal to be Pyrrhic. At the same time, I celebrate that the U.S. avoided the curse of winning the bid.
Wednesday, December 8, 2010
Not Everything Can Be Explained in Terms of Efficiency
In a post that is almost a parody of the emotionless, nerdy, borderline non-human economist, Dennis Coates sets out to explain why we should be happy that Qatar will host the 2022, but really he just succeeds in demonstrating the limits of economics as an explainer of real-life satisfaction. His reasoning: