Event Title
Parallel Session 22, Mega Events & Music Festivals Track: Hosting the Summer Olympics and Its Effect on Income Inequality: A Preliminary Assessment
Location
Classroom 205
Start Date
14-12-2017 3:15 PM
End Date
14-12-2017 3:40 PM
Description
Purpose
This study estimates the effect of the summer Olympics on long-term changes in income inequality on host countries. It forms part of a larger researcher agenda that seeks to provide a more comprehensive socio-cultural evaluation of mega-events beyond the rather narrow perspectives normally provided by general income modeling approaches and cost-benefit analyses (Baade & Matheson, 2016; Madden 2002; Zimbalist, 2015). The paper seeks to add to the growing corpus of mega-events studies that altogether inadequately assess the longer-term consequences of hosting mega-events such as the Olympics. In particular, the study seeks to open new perspectives on the possible linkages between hosting the Olympics game and long-term income inequality.
Design/methodology/approach
Using the Gini coefficient as a proxy measure for income inequality, the study collected Gini coefficient data for countries that hosted the summer Olympics between 1976 (Montreal, Canada) and 2012 (London, UK), with the range of data spanning 10 years before the year of hosting (T0 - 10) to 10 years after the event (T0 + 10). To test whether hosting the summer Olympics resulted in a different trajectory for the Gini coefficient of the host country, time series analyses consisting of several homogeneity tests applied to pre- and post-event years were conducted on the time series data.
Findings
Preliminary results of the analysis suggest that on an aggregate level, countries that hosted the summer Olympics experienced a long-term decline in Gini coefficients up to T0 + 10 years after the mega-event. However, the post-hosting effect on income inequality differs considerably between host countries. In the case of the United States, which hosted the Olympics twice (Atlanta, 1996, and Los Angeles, 1984), the Gini coefficients rose after the two events. In other host countries, the effect on income inequality after the Olympics was negligible while in others, the Gini coefficient declined in the long-run.
Research limitations/implications
The study's results, however tentative, point toward mega-events as general catalytic events for reducing levels of income disparity and improving the distribution of income for populations of countries hosting them. It remains unclear how this relationship is realized and whether the effect is consistent across differences in economic and other characteristics of Olympics host countries.
However, because hosting mega-events entail the deployment of massive amounts of funds, the results of this exploratory study suggest how funds are deployed matters just as much if not more than the amount spent for hosting, with the effects transcending direct and indirect economic repercussions, reaching into long-term social consequences for the host population for which the evidence reported remains tenuous (Kasimati & Dawson, 2009).
Because the current study reported is only at an initial and descriptive stage, there remains substantial work that needs doing to refine the analytic and design steps to ensure that external artificial factors do not confound the findings.
Practical implications
Although the findings suggest that hosting mega-events such as the Olympics tend to improve income distribution in host countries, deeper investigation of within-sample variations should yield findings essential to the efficient and beneficial utilization of funds spent for hosting mega-events.
Originality/value
Because extant studies on mega-events narrowly frame socio-economic outcomes and do not extend beyond the short-term horizon (with a few exceptions, see (Baumann, Engelhardt, & Matheson, 2010), the current study hopes to uncover more long-term and socially broader ramifications of hosting mega-events such as the Olympics (Rose & Spiegel, 2011).
References
Baade, R. A., & Matheson, V. A. (2016). Going for the Gold: The Economics of the Olympics. 30(2), 201-218. doi:10.1257/jep.30.2.201
Baumann, R., Engelhardt, B., & Matheson, V. (2010). The Labor Market Effects of the Salt Lake City Winter Olympics. Retrieved from https://ideas.repec.org/p/spe/wpaper/1002.html
Kasimati, E., & Dawson, P. (2009). Assessing the impact of the 2004 Olympic Games on the Greek economy: A small macroeconometric model. Economic Modelling, 26(1), 139-146. doi:https://doi.org/10.1016/j.econmod.2008.06.006
Madden , J. R. (2002). The Economic Consequences of the Sydney Olympics: The CREA/Arthur Andersen Study. Current Issues in Tourism, 5(1), 7-21. doi:10.1080/13683500208667904
Rose, A. K., & Spiegel, M. M. (2011). The olympic effect. The Economic Journal, 121(553), 652-677.
Zimbalist, A. (2015). The Illusory Economic Gains from Hosting the Olympics World Cup. World Economics, 16(1), 35-42.
Parallel Session 22, Mega Events & Music Festivals Track: Hosting the Summer Olympics and Its Effect on Income Inequality: A Preliminary Assessment
Classroom 205
Purpose
This study estimates the effect of the summer Olympics on long-term changes in income inequality on host countries. It forms part of a larger researcher agenda that seeks to provide a more comprehensive socio-cultural evaluation of mega-events beyond the rather narrow perspectives normally provided by general income modeling approaches and cost-benefit analyses (Baade & Matheson, 2016; Madden 2002; Zimbalist, 2015). The paper seeks to add to the growing corpus of mega-events studies that altogether inadequately assess the longer-term consequences of hosting mega-events such as the Olympics. In particular, the study seeks to open new perspectives on the possible linkages between hosting the Olympics game and long-term income inequality.
Design/methodology/approach
Using the Gini coefficient as a proxy measure for income inequality, the study collected Gini coefficient data for countries that hosted the summer Olympics between 1976 (Montreal, Canada) and 2012 (London, UK), with the range of data spanning 10 years before the year of hosting (T0 - 10) to 10 years after the event (T0 + 10). To test whether hosting the summer Olympics resulted in a different trajectory for the Gini coefficient of the host country, time series analyses consisting of several homogeneity tests applied to pre- and post-event years were conducted on the time series data.
Findings
Preliminary results of the analysis suggest that on an aggregate level, countries that hosted the summer Olympics experienced a long-term decline in Gini coefficients up to T0 + 10 years after the mega-event. However, the post-hosting effect on income inequality differs considerably between host countries. In the case of the United States, which hosted the Olympics twice (Atlanta, 1996, and Los Angeles, 1984), the Gini coefficients rose after the two events. In other host countries, the effect on income inequality after the Olympics was negligible while in others, the Gini coefficient declined in the long-run.
Research limitations/implications
The study's results, however tentative, point toward mega-events as general catalytic events for reducing levels of income disparity and improving the distribution of income for populations of countries hosting them. It remains unclear how this relationship is realized and whether the effect is consistent across differences in economic and other characteristics of Olympics host countries.
However, because hosting mega-events entail the deployment of massive amounts of funds, the results of this exploratory study suggest how funds are deployed matters just as much if not more than the amount spent for hosting, with the effects transcending direct and indirect economic repercussions, reaching into long-term social consequences for the host population for which the evidence reported remains tenuous (Kasimati & Dawson, 2009).
Because the current study reported is only at an initial and descriptive stage, there remains substantial work that needs doing to refine the analytic and design steps to ensure that external artificial factors do not confound the findings.
Practical implications
Although the findings suggest that hosting mega-events such as the Olympics tend to improve income distribution in host countries, deeper investigation of within-sample variations should yield findings essential to the efficient and beneficial utilization of funds spent for hosting mega-events.
Originality/value
Because extant studies on mega-events narrowly frame socio-economic outcomes and do not extend beyond the short-term horizon (with a few exceptions, see (Baumann, Engelhardt, & Matheson, 2010), the current study hopes to uncover more long-term and socially broader ramifications of hosting mega-events such as the Olympics (Rose & Spiegel, 2011).
References
Baade, R. A., & Matheson, V. A. (2016). Going for the Gold: The Economics of the Olympics. 30(2), 201-218. doi:10.1257/jep.30.2.201
Baumann, R., Engelhardt, B., & Matheson, V. (2010). The Labor Market Effects of the Salt Lake City Winter Olympics. Retrieved from https://ideas.repec.org/p/spe/wpaper/1002.html
Kasimati, E., & Dawson, P. (2009). Assessing the impact of the 2004 Olympic Games on the Greek economy: A small macroeconometric model. Economic Modelling, 26(1), 139-146. doi:https://doi.org/10.1016/j.econmod.2008.06.006
Madden , J. R. (2002). The Economic Consequences of the Sydney Olympics: The CREA/Arthur Andersen Study. Current Issues in Tourism, 5(1), 7-21. doi:10.1080/13683500208667904
Rose, A. K., & Spiegel, M. M. (2011). The olympic effect. The Economic Journal, 121(553), 652-677.
Zimbalist, A. (2015). The Illusory Economic Gains from Hosting the Olympics World Cup. World Economics, 16(1), 35-42.
