Early next month we’ll learn whether Australia has won the hosting rights rights to the FIFA World Cup in 2022. Surprisingly, given this would entail such a large amount of government expenditure, discussion in the media relates only to the tactics of the bidding team and the horse race implications of corruption in FIFA. Perhaps an issue has to be tied to short run party political fortunes (such as the NBN or public transport) to bring up media sound and fury? Or maybe you need to be tied to a Great and Good personage (in this case Frank Lowy) to assure everyone that it is a serious and reasonable matter (he is fabulously wealthy after all, he must be a very serious man).
Regrettably I’m unable to write much on it at the moment either due to base physical constraints, but I do want to point people’s attention to this paper by Kavetsos and Szymanski (also treated in popular form in Soccernomics). Hosting major sporting events may not give you good infrastructure, they don’t expand the economy, and they don’t increase participation…but they might make you happy, a end to which money’s effectiveness is notoriously debatable.
The widely proclaimed economic benefits of hosting major sporting events have received substantial criticism by academic economists and have been shown to be negligible, at best. The aim of this paper is to formally examine the existence of another potential impact: national wellbeing or the so-called “feelgood” factor. Using data on self-reported life satisfaction (happiness) for twelve European countries we test for the impact of hosting and of national athletic success on happiness. Our data covers three different major events: the Olympic Games, the FIFA World Cup and the UEFA European Championship. We find that the “feelgood” factor associated with hosting football events is large and significant, but that the impact of national athletic success on happiness, while correctly signed, is statistically insignificant.
The debates over the usefulness of measures of subjective wellbeing are well trod (and are canvassed in the article) so we need not retread them here (though I think for all their flaws, they’re no worse than utility). The writers make interesting comparisons within the confines of this measure. Based on regression coefficients, hosting a football tournament is roughly the same magnitude as being married, 0.6 times the magnitude of moving from the 2nd to the 3rd income quartile and 0.3 the magnitude (the other way obviously) of becoming unemployed. Given the difficulties achieving any of those by government policy, a major event might be a bargain.
What strikes me though is the comparison with athletic success. Given the elite sport lobby is uncritically quoted as saying the nation’s self esteem is reliant on the gold medal tally, this research provides a wonderful opportunity to redirect funding away from John Coates athlete mills (the kind of thing that should have perished with the German Democratic Republic) and towards something that might actually perform at the criteria they claim. Even disregarding the happiness factor, it might be preferable to know that money is to be wasted, let it be in white elephant stadiums rather than the petulant brats we sent to Delhi.