UBS Economist: Olympics “No Big Deal”
Aug 8, 2008
Jonathan Anderson, an economist at UBS, today released a study using Olympic history and population to assess likely economic impact of the Beijing Olympics on China’s economy.
His conclusion: The Olympics are “no big deal”.
We published this chart twice before in our Asian economics coverage – but with the continued flood of interest around the opening of the 2008 Olympic Games and the seemingly endless questions about what they mean for Chinese growth, we thought this would make an ideal initiation for our EM Daily Chart series.
What we’ve done in the chart is to take the host cities for every summer Olympics, beginning with Munich in 1972 and ending with London in 2012, and show the ratio of the metropolitan area population as a share of national population for the country in question. This is a good minimum proxy indicator for the relative size of the city economy in national GDP (minimum, since urban incomes are almost universally higher than rural incomes).
Look at Athens in 2004, Seoul in 1988, Sydney in 2000; these Olympic games were clearly a “big deal” for the countries in question, since the host cities accounted for 20% to 40% of national population and almost certainly an even higher share of national income.
Now look at Beijing 2008. As it turns out, Beijing comprises a total of 1.1% of the Chinese population and around 2.5% of Chinese GDP – the lowest ratio for any Olympic games in the past 30 years and likely the lowest ratio for any Olympic games in modern recorded history.
The only other instance that even came close was Atlanta in 1996, and as best we can measure the Atlanta Olympics were emphatically not a “big deal” for the US economy in that year. Sure enough, our estimates for China put the impact of the 2008 Olympics far behind the decimal point in terms of growth impact as well.