“Going for the Gold: The Economics of the Olympics”
The Summer Olympics are just around the corner and the Spring 2016 issue of the Journal of Economic of Economic Perspectives has a paper on the economics of the Olympics. The paper is authored by two economists who have written extensively on the economics of mega events, Rob Baade and Victor Matheson. Here is a link to the paper. From the paper, here is Baade and Matheson on the cost of the bidding process.
“Bidding for the Olympics is no small undertaking. A key to the bidding process involves a visit by the Evaluation Commission of the International Olympic Committee which assesses the condition of the applicant city. A significant portion of the bidding expense relates to the preparations the applicant city undertakes to impress the Evaluation Commission, and these plans, including detailed architectural renderings, financial estimates, and pre-event marketing, are likely to be extensive since it cannot be known what the preparations of the other applicant cities will be. Chicago, for example, spent at least $70 million and perhaps over $100 million on its unsuccessful application to host the 2016 Games (Pletz 2010; Zimbalist 2015). But the costs of the formal bidding process pale in comparison to the expenses a region will incur should it actually be selected by the International Olympic Committee.”
Here is the information on the two references in the paragraph.
Pletz, John. 2010. “Chicago 2016’s Final Tally: $70.6M Spent on Olympics Effort.” Crain’s Chicago Business, May 17.
Zimbalist, Andrew. 2015. Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup. Brookings Institution Press.