The host country spends so much on the Olympics, however, the tourism does not make up for the amount they spend. There is not enough tourism in the two weeks to cover the costs the host has spent. Countries that host the Olympics should not be looking for an economic success. The Games are becoming more and more expensive because the hosting countries want to out-do the previous host. One of the reasons that the countries want to host is because it makes them feel good.
www.nytimes.com/2014/02/06/business/economy/the-olympics-a-costly-feel-good-moment.html?ref=economy&_r=0
8 comments:
While I agree that the price tag is outrageous and keeps getting larger by the year, I think it is also part of the tradition behind the Olympics. The host country agrees to host and spend such large sums of money because they know that in time, it will come back to them. As mentioned in the article, it is unrealistic to think tourism over the two week span could possibly make up for the spending on the events, but in time the country will use the facilities for other events. When designing for the Olympics, more builders and contractors plan for future use as a benefit and necessity to the plan, thus not pouring $50 billion into a two week event.
I thought Russia has the perfect geographic location to hold the world event like Olympics because it is between Asia continent and Europe. It is disappointing how there is not enough tourism to make economic benefit.
If the poor cell phone service in Sochi isn’t enough to decrease incentive for the 2014 Olympics the significant environmental damage due to construction for the event will. The expenditure is not the only issue of the cost of the 2014 Winter Games. Illegal waste dumping, contaminated drinking water, dangerous construction on unsound ground, light pollution, greenhouse gas emissions and disruption to native animal populations and habitats are some of the concerns due to the cost of the Sochi Olympic Games. Images in the media of orange waters as a result of this environmental damage are off-putting. And these are only some of the social costs of the 2014 Winter Games. The fact that so much money is being put into the Olympics at the cost of multiple other externalities is questionable. If money was the only issue I would say that the cost of the Games is on Russia, however these negative effects from externalities make me question if the $50 billion expenditure on the event is Russia’s own ego-boost.
Additional source: http://www.washingtonpost.com/blogs/worldviews/wp/2014/02/05/15-signs-that-russia-is-not-very-ready-for-the-olympics/
I agree with what you are saying about how the host country overpays and doesn't see all of that money come back to them, but it can also do a lot of good for the city as a whole. The side benefits is that this helps out businesses in and around Sochi. This can help out the government in that "feel good" way you talked about and brings the people together. In the end it may not be worth the cost to host, but there are still some positives to it.
I agree with Catherine's comment about externalities. There are many costs in this year's games other than the actual financial cost of putting on the games. So with the actual financial cost of the games, and the increasing awareness of these externalities, these games are becoming much more costly than they are beneficial for the world to have. They are still an important event, but the amount of money and social cost needs to be evaluated.
I agree with Catherine's comment about externalities. There are many costs in this year's games other than the actual financial cost of putting on the games. So with the actual financial cost of the games, and the increasing awareness of these externalities, these games are becoming much more costly than they are beneficial for the world to have. They are still an important event, but the amount of money and social cost needs to be evaluated.
- The theory behind spending so much to prepare a city for the Olympics goes beyond focusing on the spike in tourism. Host cities spend tons on money on infrastructure and cleaning up cities. One of the most important means of growth for a country is infrastructure, if roads are bad and buildings are run down there is not much potential for things to get going in a specific city or country. But this is just the theory, when you have new hosts trying to outdo old host, it becomes a battle of ego and that is a recipe for disaster.
Is it healthier for the people and the country to bring the Olympics to a sustainable country that could profit off of the new facilities and tourism while not going bankrupt? the next Olympics will be in Seoul which had their the last Olympics in 1888. I wonder if they will re-do the old buildings or create a whole new facility? It does create jobs to build new building but in Sochi it is not paying them back.
The government does not intervene with the economy, and thus the private sector is large. But the country has a lot of corruption and other negative externalities. Is this an example of why government needs to be involved? In order to correct these market failures?
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