Hosting a Mega-Event: Is It Good or Bad for the Economy? General Equilibrium Models As a Litmus Paper Test

26 Pages Posted: 3 Oct 2017

See all articles by Martina Sartori

Martina Sartori

Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy

Date Written: September 29, 2017

Abstract

Hosting mega-events has long been regarded as an opportunity for economic growth, creating long-lasting benefits and attaining international recognition. Recently, both the scientific community and the public opinion at large have turned much more skeptical about the impact of mega-events. Why is it that some events appear successful and other disasters? Why the perception of impacts has changed over time? To answer these (and other) questions, there is a need to go beyond the simple narratives and “stylized facts”, to undertake some serious scientific investigation, based on verifiable data and testable models. Despite the fact that most recent studies use the same modeling tool, namely some Computable General Equilibrium (CGE) model, results are sometimes contradictory, thereby hindering the trustiness of the economic analysis for policy guidance.

In this paper, we show that results are different because assumptions are different and because the range of effects considered is different, even when the same model is employed. Furthermore, some critical hypotheses are not often clearly stated. We advocate some kind of standardization in the process of model building for the economic assessment of mega-events. Only a transparent and replicable model exercise can serve as a “litmus paper”, to ascertain whether hosting a mega-event is good or bad for an economy.

Keywords: computable general equilibrium modeling, methodological issues, mega-events economic impact assessment

JEL Classification: C68, Z28, Z38

Suggested Citation

Sartori, Martina, Hosting a Mega-Event: Is It Good or Bad for the Economy? General Equilibrium Models As a Litmus Paper Test (September 29, 2017). University Ca' Foscari of Venice, Dept. of Economics Research Paper Series No. 21/WP/2017. Available at SSRN: https://ssrn.com/abstract=3046142 or http://dx.doi.org/10.2139/ssrn.3046142

Martina Sartori (Contact Author)

Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy ( email )

viale Filippetti, 9
Milan, 20122
Italy

Register to save articles to
your library

Register

Paper statistics

Downloads
34
Abstract Views
237
PlumX Metrics