Economic_Impact_of_the_London_2012_Olymp

Economic_Impact_of_the_London_2012_Olymp - The Economic...

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- 1 - The Economic Impact of the London 2012 Olympics Adam Blake 2005/5 Christel DeHaan Tourism and Travel Research Institute Nottingham University Business School Jubilee Campus Wollaton Road Nottingham NG8 1BB Tel: +44 (0)115 846 6636 Fax: +44 (0)115 846 6612 e-mail:
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- 2 - The Economic Impact of the London 2012 Olympics Adam Blake *† A BSTRACT On 6 July 2005 the International Olympic Committee awarded the right to stage the 2012 summer Olympic and Paralympic Games to London. The decision to bid for the Games is a politically contentious one, with many arguments that support the benefits that such “mega events” bring and many arguments that highlight the detrimental effects that they can incur. This political decision is further complicated by the existence of groups in society that benefit from the hosting of such events and other groups that lose out because of them; and because of pressure groups that exist on both sides of this argument. This paper examines the economic benefits and costs of hosting the Olympics, in parallel with other studies that have estimated other social and environmental costs and benefits. The objective is to use the most appropriate form of methodology to examine the net economic consequences of hosting the Games for both the UK as a whole and for London. The net benefits are found to be positive, and large relative to the investment in the bidding process, although smaller than previous studies that have tended to examine gross effects. Keywords: Olympic Games, Economic Impact, CGE Modelling. JEL Classification: C68, D58, L83, * The author is a Lecturer in Tourism Economics at the Christel DeHaan Tourism and Travel Research Institute, Nottingham University Business School. Correspondence address: [email protected] nottingham.ac.uk. The author would like to acknowledge support, both in terms of funding and data provision for this report, which is part of a larger Olympics Games Impact Project funded by the Department of Culture, Media and Sport, Greater London Authority Economics and the London Development Agency. London2012, the body responsible for bidding for the Olympic Games also assisted with data and information provision.
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- 3 - The Economic Impact of the London 2012 Olympics Adam Blake Introduction The evaluation of the economic importance of the Olympics to a host city, its region and country has become an important aspect of the overall evaluation of the value or worth of hosting the Olympic Games. These evaluations are often known as economic impact assessments or reports, and are increasingly being used in the early stages of the Olympic bidding process 1 . It is vitally important that the host city and the organising committee in the host city are aware of the scale of the economic benefits that hosting the Games may bring. This allows the Games to be promoted in the local context as bringing significant benefits to the local economy as well as providing the organising committee with the scale of benefits so that it can have an improved understanding of how large the costs of bidding for and hosting the games should be.
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