Economics of the Olympics

AbstractThis chapter provides an overview of the literature on the impact of the Olympics. In addition, empirical findings relating to the announcement effect associated with the Olympics are presented, using London 2012 as a case study. Original research based on the impact of the 2012 announcement on participation rates in sport and physical activity in the UK is included. In the immediate aftermath of the announcement, there were notable gains on the London Stock Exchange experienced by companies in the construction sector and the leisure and hospitality sectors. The data suggest a positive and statistically significant effect of the Olympic announcement on participation in sport and leisure activity. They also show that there are potential intangible benefits associated with hosting the Olympics, but more work is required to unpick the mechanism which links the Olympics to participation in sport and to establish whether the legacy effects are permanent.