Rio Reality Check
By Amy Willis
My family has been enjoying watching the Olympics over the past couple of weeks. The spectacle of sport can be inspirational. (And with a young swimmer in the house, we are ALL about Katie Ledecky and Michael Phelps.) If you missed the recent EconTalk episode with Matthew Futterman, check out the excellent discussion of the Olympics, starting at about 41:56.
But there’s a lot of economics to consider in talking about the Olympics, too. Probably the biggest is the decision to host an Olympics in your country. Hosting the Olympics seems to be popularly regarded as a boon to the host city. But as Aeon Skoble points out, this is a dubious claim. Similarly, Christopher Koopman and Thomas Savidge suggest Rio might be the biggest loser of all at these games. For more general discussion of the sort of “megaproject” like building an Olympics venue, see this EconTalk episode with Bent Flyvbjerg.) Host cities losing money is not always the case, however, as David Henderson pointed out several years ago. (Of course, he also offered his condolences to Rio when they “won” the bid to host the games in 2009.) These games also make it unclear whether broadcasters (and host cities) can rely on the visibility wrought by mass viewership. It’s down this year, especially among young people.
And what of the champions? Carey Wedler for FEE points to the “victory tax” gold, silver, and bronze medals are subject to. The IRS loves champions, too. And that gold medal, by the way, not even real gold.
And just for fun…How fast is Usain Bolt? Check this out.