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World Cup Bid 2018/2022

Stephen J. Dubner blogged about a report I wrote about the 2018/2022 World Cup bid a group of Americans has put together. I read comments on the blog and felt I needed to respond in a small way to them.

The report was intended to initiate a discussion about the merits of hosting the World Cup. If the blog comments are an indication, it may have succeeded in that, at least temporarily. In drafting the report I wanted to 1) assess the methodology and assumptions used by the consulting firm that projected a $5 billion impact on the US economy and 2) discuss the costs of hosting the event.

Assessing the methods was problematic as the bid committee did not respond to my emails after I told them my reason for wanting the report. I was left with evaluating the methodology and assumptions by referring to the press release posted on the bid committee website. Commenters at the freakonomics blog frequently pointed out issues I missed (often without having read the report to see that I did actually consider them) but not a one noted that my report is public for all to read and evaluate while the bid committee report is a secret, leaving us only to trust them.

Interestingly, I was accused of trying to have it both ways, that there is no impact and that the impact is small. What I actually said was that even if the report has the numbers exactly correct that the impact is pitifully small, though the bid committee does not want people to see that. Instead it boldly states $5 billion for the entire US as if that number is impressive. In fact, that number is less than the rounding error in the National Income and Product Accounts, so asserting that it is of vast significance is misleading. I then went on to argue why I doubt the number is correct.

Evaluating costs of hosting these events is quite difficult. There is very little evidence on the costs local jurisdictions incur often because the costs are opportunity costs, like redirecting local government employees from one activity into another. They are also difficult to identify because they are not clearly split out of local budget documents. For example, overtime pay for police may be listed in a budget, but there is no indication of how much of it relates to the event and how much relates to other local festivals, sports contests, and the like.

I am happy to see that some of the commenters suggested that the bid committee pay expenses, that local communities not pay extortion to attract visiting clubs, and that the American taxpayer should not be expected to pay the costs of the event while the benefits accrue to a small segment of society. That was exactly the point. I am not opposed to the World Cup. I am opposed to using public funds to generate corporate welfare for the soccer industry.