Modelling the economic impact of sports events: The case of the Beijing Olympics

Major sports events are used increasingly by policy-makers to stimulate economic development. This has resulted in a growth of academic interest in ways of analysing their contribution. Following a review of the literature on the contrasting approaches that have been used, this paper assesses the economic impact of the Beijing Olympics, in particular the tourism impact, using computable general equilibrium (CGE) modelling. To add novelty, it analyses the data under conditions of imperfect competition, an approach that has been used to good effect in other contexts, notably international trade. The findings suggest that staging the Beijing Olympics brought economic benefits to the host economy but that the scale of the impact was not significant compared to the total size of the economy. The welfare impacts of the Beijing Olympics under imperfect competition are shown to be higher than when perfect competition is assumed. This is explained by the pro-competitive effect.

► We assess the economic impacts of the Beijing Olympics, especially tourism impacts. ► Data were analysed using CGE modelling under conditions of imperfect competition. ► The Beijing Olympics brought economic benefits to the host economy. ► The scale of the impacts, however was not significant. ► Pro-competitive effects explain why impacts are larger under imperfect competition.