Hosting mega-events: A guide to the evaluation of development effects in integrated metropolitan regions

Each time a city or region seeks to host a mega-event such as the Olympic Games, boosters proclaim vast benefits related to increased tourism and wealth flowing into the area. While benefits can exist in some form or another, the net gain for a region seeking to bolster its economic standing is often overstated. This is especially true for highly integrated regions when a center city is the sole entity making the event investment. Much of this results from a collection of erroneous assumptions and a failure to account for the integration of economic activity within a region. We address common issues with these reports and provide a guide for evaluating the net benefit of hosting an event. More specifically, we argue with detailed examples that industry share and commute shed analysis are indispensable tools when evaluating capture rates of new spending within the boundaries of the investment area.

► We address measurement of economic effects of hosting large sport events.
► We address common causes of overestimation of mega-event benefits.
► Commute shed analysis leads to reasonable expectations of large event returns.
► Integration of a region can result in significant leakage from a host city.
► This integration can result in incentives for funding cooperation with nearby areas.