The Economists Were Right? Say it Ain't So, Joe!

Tucked away in this article about the potential economic impact of 2008 Demcratic National Convention planned for Denver is this startling admission about the 2005 NBA All-Star Game.

Officially, the convention is a strictly Denver affair. Convention organizers put together clusters of hotels where rooms could be dedicated to the event and shuttles could efficiently ferry people to the Pepsi Center.

The bureau is trying to concentrate the action in downtown Denver. It's planning a marketing campaign to encourage metro-area residents to come to downtown Denver during the convention. The bureau wants to avoid a repeat of the 2005 National Basketball Association All-Star Game, held at the Pepsi Center in 2005.

Fears about traffic around downtown that weekend kept many people away and hurt the area economically, Grant said.

That's a far cry from the 100,000 visitors the convention bureau was predicting back in January 2005. Strangely, the predictions all made headline news in the local papers, but the actual economic figures are buried in an tangentially related article published two years later. That's like writing a story on the front page of the sports section about the betting line for a big game but then not even reporting on the game itself.

Of course, economists who study mega-events routinely cite crowding-out and congestion as major factors that limit the positive net economic impact of these events; however, economic impact predictions rarely take this issue into account. As Denver prepares for a 2018 bid to host the Winter Olympics, I hope that they talk to a couple of dismal scientists willing to tell them that the glass is half-empty instead of hired consultants being paid to tell the city that the glass half-full (or overflowing, even.)