The Impact of the London Olympics Announcement on Property Prices

This study estimates the impact of London’s successful 2012 summer Olympics bid on property prices. Using a self-constructed dataset of a sample of property transactions, we estimate a semilogarithmic hedonic model for Greater London. Applying a difference-in-differences estimator, we find that properties in the host boroughs are sold between 2.1 and 3.3 percent higher, depending on the definition of the impact area. A similar investigation based on radius rings suggests that properties up to three miles away from the main Olympic stadium sell for 5 percent higher. The impact on host boroughs leads to an estimated overall property price increase of £1.4 billion, having substantial social and financial implications for existing residents. JEL classification: H0; L83; R53