Going For the Gold and Coming For the Economy: Is Hosting the Olympics Worth the Money?

Going For the Gold and Coming For the Economy: 

Is Hosting the Olympics Worth the Money?

Written by: Ashley Anderson

It is 2022 and the Winter Olympic Games have just concluded. Thousands of representatives from countries have made their citizens proud and many even took home a precious gold medal. No matter if it’s summer or winter, the Olympics has been a tradition for centuries to unite athletes and for them to exhibit the skills they possess in the sport they love the most. While the Olympics is truly a unique, exhilarating, and temporary experience, — for both athletes and observers — many fear that the costs of hosting the Olympics far outweigh the benefits.

​​

Let’s go back to an example that has sparked the argument of whether the Olympics is worth the money or not: the 2020 Summer Olympic Games in Tokyo, Japan. Before hosting the Olympics, many citizens acknowledged the decades of economic stagnation Tokyo, Japan had faced as well as their economic struggles due to multiple natural disasters. As a way to shake off this image of Japan, Tokyo decided to host the 2020 Olympic Games. However, this decision was bound to have negative economic consequences. According to the Asahi Shimbun newspaper, “Tokyo officials emphasized that the long-term economic “legacy effects” from the Olympics would total 27.1 trillion yen (roughly $234,413,645,000 USD).” It is important to note the long-term effects of hosting large events like the Olympics; thus, which can negatively take a toll on whether a country is truly allocating its money efficiently. People in cities, like Tokyo, who put their money towards hosting the Olympics Games, are throwing away money that could have been used towards a variety of more important things such as job opportunities, infrastructure, roads, etc. As well, since Tokyo hosted the Olympic Games in 2020, the health cost of hosting the Olympics skyrocketed, as many became ill from attending the Games – 436 individuals (including athletes) to be exact. As Jennifer Wills from Investipodiea stated, “Because most cities have ended up falling massively in debt after hosting the Games, cities without the necessary infrastructure may be better off not submitting bids.”

The graphical image above is a representation of the costs spent on the Olympics from 1968 to 2016. A common trend that can be observed from the graph is the increase in Olympic spending over the years. As the construction of venues, amount of spectators, incoming athletes, and the introduction of new sports is increasing, so does the price tag on hosting the Olympics. Some cities, over others, struggle with what many call “Olympic debt” and bid on hosting the Olympics before even realizing that they are in over their heads. Therefore, before hosting the Olympics, a country must evaluate its current economic situation and determine whether they have the funds to host such a large, monumental event.

In terms of the upfront cost, hosting the Olympics seems outrageous to many. However, in terms of the overall economy, the Olympics isn’t all bad news. According to Matthias Firgo from IDEAS, “In the short-run, hosting the Summer Olympics boosts regional GDP per capita by about 3 to 4 percentage points relative to the national level in the year of the event and the year before.” The Olympics has also been known to increase a host country’s global trade and stature levels tremendously. As we have learned in our Economics class, one of the goals that a country should focus on is economic growth. Well, hosting the Olympics does just that, as it promotes economic growth and limits unemployment by expanding job opportunities. In addition, hosting the Olympics gives individuals an incentive to invest in long-term infrastructure in order to attract more international tourists, businesses, etc.

While the costs of hosting the Olympics can be high, hosting the Olympics itself is an act that must continue to be done. In my opinion, I feel that the Olympics is much more than a price tag. The Olympics allows people around the world to connect with one another and come together at an event where they can showcase their true athletic abilities. The Olympics promote enthusiasm, as it motivates both viewers and athletes to partake in either observing or competing in the Games. It becomes increasingly clear that the social, cultural, and economic benefits of hosting the Olympics far outweigh its costs, making it a tradition that should be showcased around the world for years to come. For more information on the costs of the Olympics and ways around the costs, use this link to watch a video, “Are the Olympics Worth the Cost?”: https://www.cfr.org/video/are-olympics-worth-cost Works Cited Firgo, Matthias. “The Causal Economic Effects of Olympic Games on Host Regions.” WIFO Working Papers, WIFO, 23 Nov. 2019, https://ideas.repec.org/p/wfo/wpaper/y2019i59.

Hamburg, Andrew. “Going for Gold: The Impact Hosting the Olympics Has on National Employment Rates .” OBJ, May 2013, https://digitalccbeta.coloradocollege.edu/pid/coccc:8040.

Multiple Authors. “Tokyo Official: No Way We Can Assess Economic Impact of Games: The Asahi Shimbun Breaking News, Japan News and Analysis.” The Asahi Shimbun, 21 Sept. 2021, https://www.asahi.com/ajw/articles.

Settimi, Christina. “Olympics Hosting - Pros & Cons.” ProCon.org, 27 Jan. 2022, https://www.procon.org/headlines/hosting-the-olympic-games-top-3-pros-and-cons.

Ueno, Hisako. “Tokyo Was Promised Glory and Riches. It Got an Olympics in a Bubble.” The New York Times, The New York Times, 6 Aug. 2021, https://www.nytimes.com/2021/08/06.

Wills, Jennifer. “The Economic Impact of Hosting the Olympics.” Investopedia, Investopedia, 8 Feb. 2022, https://www.investopedia.com/articles/markets-economy/092416.