Hosting a major sporting event - economic gains are unlikely, but will it bring happiness?

The football World Cup in South Africa is almost upon us and the clock is ticking down on London 2012. It's a timely moment to ask: why, when it costs a country billions of pounds to host a major international sporting event, do they bother?

The usual argument is that it's all about the legacy - the lasting economic benefit. But according to two economists, Georgios Kavetsos and Stefan Szymanski, the evidence for this simply isn't there. For example, there's research showing that the economic benefit of sports-related investment is lower than for other types of investment. And the newly-created employment opportunities associated with sport are most often low-skilled and casual. Now Kavetsos and Syzmanski have tested an alternative explanation for the political appeal of big sports events: perhaps they make the population happier.

Increasingly, governments are also choosing to invest huge quantities of public money in training athletes so as to boost their country's chances of sporting success. The usual justification is that sports success is good for a country's well being and national pride. Kavestsos and Syzmanski also tested this claim.

The researchers mined the Eurobarometer Survey series, involving 12 European nations, including the UK, between the years 1974 to 2004. Twice a year, a random selection of 1000 people per country were interviewed and one of the questions was about their life satisfaction. Kavestsos and Syzmanski looked for any changes in average life satisfaction scores in surveys that took place in the Autumn following the Olympics, Football World Cup or European Cup. Specifically, they wanted to know if a country doing better than expected in a competition had any beneficial effect on average life satisfaction and/or whether hosting a competition had any benefits (the data available meant the latter question was restricted to the hosting of football events).

There was very little evidence that performing better than expected at a sports event had any positive benefit for the average life satisfaction scores of a country's citizens. The data moved in the right direction but with one exception the effects were not statistically significant. By contrast, there was strong evidence that hosting a major international football event boosted the life satisfaction of a host nation's citizens. Good news for South Africa.

Just how large was the life satisfaction increase for a typical citizen in a host nation? Kavetsos and Syzmanski said it was pretty big: three times the size of the happiness boost associated with gaining a higher education; one and half times the happiness boost associated with getting married; and nearly large enough to offset the misery triggered by divorce.

Is there a catch? Unfortunately, yes. By one year after the event, the benefits had gone, so the effects on people's happiness were extremely short-lived (the effects of marriage on happiness, by contrast, are long-lasting). There was also no evidence of a host country's happiness being boosted in anticipation of hosting an event.

'Most politicians calculate that hosting events can only enhance their political standing,' Kavetsos and Syzmanski said. 'This makes sense if the benefits of hosting are not derived through economic gains [which the research says don't exist], but through the feelgood factor, specifically associated with being the host.'
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Kavetsos, G., & Szymanski, S. (2010). National well-being and international sports events. Journal of Economic Psychology, 31 (2), 158-171 DOI: 10.1016/j.joep.2009.11.005