Quantifying the ‘Un-quantifiable’: Valuing the Intangible Impacts of Hosting the Summer Olympic Games

The Summer Olympic Games, it is argued, is a significant cultural good as well as a popular sporting spectacle; it provides the impetus for environmental and economic improvements in the host city, gives a boost to national pride and so on. This paper examines whether there is an economic basis for such claims. To date, attempts to quantify the benefits of hosting major sporting events have focused exclusively on tangible gains; those benefits associated with a clearly identifiable cash-flow. The evidence suggests that genuinely additional tangible benefits tend to fall short of corresponding measures of cost. Therefore, using a contingent valuation survey, we test the proposition that the size of the intangible (net) benefits of the London 2012 Bid might justify staging the event on cost-benefit grounds. Respondents, drawn from London, Manchester and Glasgow, were asked for their willingness to pay (WTP) to host the 2012 Olympic Games in London on the basis of the intangible impacts that this event might provide. A number of interesting issues characterise this application of the CV method. First, in order to familiarise respondents, in a contingent market, with the notion of intangible impacts, they were asked to consider and rate, in terms of relative importance, a number of intangible benefits and intangible costs. Second, respondents’ WTP is likely to be conditional on uncertainties about a number of factors such as perceived ability of the host nation to successfully deliver intangible benefits the event, how long the payment period would be and whether a bid itself will be successful. While such considerations might be controllable within the CV scenario, we also elicit information which allows us to investigate to what extent such priors influence WTP values. Third, the event itself is hosted by a specific city and, moreover, is concentrated at a particular location in the host city. Whether intangible impacts are primarily enjoyed by (certain parts of) the host city population rather than the wider country is arguable. Hence, we investigate whether WTP varies across geographical contexts and whether these differences can be explained by characteristics and attitudes of respondents that are observable because of information elicited in a CV questionnaire.