Assessing the impact of the 2004 Olympic

Games on the Greek economy: A small

macro econometric model

CHE NADIA CHE SAMSUDIN

2009871074
ISSUES/PROBLEM
 The choice of a macro econometric model is governed by
the lack of sufficient disaggregated data required for input-
output and computable general equilibrium (CGE) models.

 Blake(2005) argues that there can be substantial differences

in the two approaches with respect to the measurement of
tourism demand and the impact of construction
expenditure on the economy. Part of the reason for this
stems from the assumption of fixed prices and fixed
coefficients in I–O models, which typically results in much
higher estimates when compared with CGE models.
LITERATURE REVIEW
 Recent research by Madden (2006) on the Sydney 2000 Olympics and Blake
(2005) on the London 2012 Olympics found that are increasing popularity
reflects a growing recognition in the literature that, although I–O is less costly
and simpler to use, the assumptions imposed on the system are overly
restrictive.

 Despite these methodological differences, most ex-ante studies conclude that

the host city/region will benefit considerably in terms of GDP growth and
employment. It is not uncommon for these impacts to be substantial,
generating billions of pounds/dollars of benefit (Kasimati, 2003; Preuss, 2004).

 Recently, Madden (2006) ,Giesecke and Madden (2007) have attempted to

evaluate the appropriateness of a CGE framework by undertaking an ex-post
analysis of the 2000 Sydney Olympics. Both studies conclude that initial ex-ante
assessments over-estimated the financial gain associated with the event
because the assumptions relating to induced tourism and the responsiveness of
the labour market were overly optimistic.
METHODOLOGY

 Using a small aggregate macro econometric

modeling approaches that includes an ex-
post assessment of the impact of he
Olympics during the preparation and
implementation period (1997-2004).
 Ex-ante analysis is then conducted to
forecast of the economic legacy effects on
the impact of the Games on output and
employment post games.
FINDINGS
 Olympic Games appear to have had a positive impact
on Greek economy for the period 1997–2005 the Games
boosted economic activity by around 1.3% of GDP
(gross domestic product) per year, while
unemployment fell by 1.9% per year.
 The cumulative GDP increase attributed to the Games
over the period 1997–2005 is estimated to be 2.5 times
the total preparation cost.
 For the period 2006–2012, the Games effect is more
modest with forecasts suggesting GDP increases on
average between 0.46 and 0.52% per year and
unemployment falling on average by 0.17% per annum.
CONCLUSION
 Summer Olympics is an event that could
successfully boost the economy of the host
city by generating benefits that outweigh the
preparation cost.
 The impact effects are quite strong during
the preparation phase and the year the
Games took place, the long-term economic
legacy effects with respect to both GDP and
unemployment appear to be quite modest.