Sunday, December 13, 2009

Vancouver 2010 Olympic Torch

Olympics is huge business and Vancouver 2010 will be no different. The Vancouver Sun estimates costs at around $6B, including many of the hidden costs. The Olympic torch is touring across Canada and was in Ottawa this weekend.

I had the pleasure and privilege of seeing it, literally a couple of feet away, as well as the actual Olympic flame (which is not the same as the torch!):

You can view the exact torch location live as it is carried across Canada on this map.

Costs & Benefits

As for costs and benefits, they are all over the place. The benefits are many an varied and very hard to measure. The Center for Policy Alternatives says:

“If Vancouver hosts the 2010 Winter Olympics, there will be a substantial net cost to British Columbians in the order of $1.2 billion, even taking into account increased tax revenues and the benefit of not having to upgrade the Sea-to-Sky highway at a later date.” And as the sole guarantor of the Games, the Province of British Columbia is assuming all the financial burden of what is clearly a risky business venture.”

"“That’s not to say the Olympics don’t have benefits,” says Mauboules. “The positive impacts for British Columbians include the pride and enjoyment from hosting the Games, the opportunity to attend events, and the use of new sports, housing and transportation facilities, to name a few.” Seth Klein, the CCPA’s BC Director, says the question for policy makers and the public is: Do the benefits outweigh the substantial price tag that comes with hosting the Games? “To date, the public has received inadequate information about the costs and benefits of hosting the Winter Olympics. We’ve basically done government’s job for them. Both federal and provincial guidelines recommend the use of multiple account evaluations for such an initiative. Yet neither level of government, nor the Bid Corporation, has undertaken such an evaluation.” “The Olympics have too often been pitched as having miraculous economic powers,” says Klein “They do not. Like all public policy choices, they come with benefits and costs, and will require trade-offs.”"

Here is another study, which says "We have come to the conclusion that most of the research which shows the Games earning profits and boosting the economy comes from government sources whereas the negative effects are uncovered by private sources"

"Benefits and advantages realized are that you can attend the games relatively easy; locals won’t have to travel far. Facilities will be useful as legacies will remain in use after the games. Jobs help growth which results in migration and local spending. Tourism will be at all time high due to media coverage. B.C then becomes more appealing, and tourists become aware of what the province has to offer. On top of that there is the considered prestige on an international stage if everything runs smoothly and goes according to plan. "

"The Vancouver Organizing Committee has estimated that only 30% of ticket sales will be purchased by foreigners. This obviously means that 70% of the tickets will be purchased by BC residents, and the majority of those will be residents of the GVRD. The problem with this is discussed in the paper “The effect of professional sports on earnings and employment in the services and retail sectors in US cities.” Coates and Humphreys (2002). It explains that professional sports have a negative effect on the economy as a whole. The reason behind this is that the sports franchise acts as a substitute with other entertainment and services around the city. So instead of a typical consumer spending money on a new t-shirt and going to the movies, they will buy a shirt at the stadium and watch the game. This doesn’t create any economic stimulation; it only substitutes the money from one area to another. The Games will feel a similar effect with ticket sales. Although the government is expecting the tourists to spend money in Vancouver and Whistler, the local residents will likely shift their spending from other entertainment to the Games, thus creating a substitution of goods and offsetting the increase of tourist spending with the decrease in local consumption. Of course the tourist spending will help the local stores but the government has treated the local consumer spending as if there is no trade off. "

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1 comment:

Rick said...

Interesting article.
"it only substitutes the money from one area to another. " is too simplistic. This assumes that everyone is interested in all activities equally. How many people pass on the opera to see a hockey game or vice versa?
We have wanted to visit Vancouver for many years but have put it off but we are coming for the Olympics. Even though, as visitors from the US, we probably won't get tickets to any event. That is a net gain for Vancouver.
Our local Winter Olympics site, Squaw Valley, CA. is still playing off the event 50 years later and has benefited, at some monetary level, every year from it.

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