This essay will critically analyse the claims that sporting events bring positive economic benefits to the host city. The analysis will focus on one mega event, namely the Olympics, and how previous events have benefitted or hindered the city in regard to the economics of the city. During the bidding to host, and indeed throughout the running of a major sporting event, it is widely assumed that sporting events are used as a catalyst for economic advancement, and many governments around the world have made hosting a major sporting event their main objective. In order to fully understand the extent of the impacts a mega event can bring to the economy, it is important to have knowledge as to how impacts are separated into three different segments, namely; direct impact, indirect impact and induced impact.
Direct impact- This is the spending done by visitors in the local economy in establishments such as hotels, B&B’s and restaurants. This income is generally used to pay the employees who live and work in the dominion.
Indirect impact- This is the recirculating of the spectators income around the economy, this can be termed a ‘ripple effect’. This income can be used to meet final demand of public and private expenses.
Induced impact- This can be termed a further ‘ripple effect’, as this is the effect brought on by the employees spending some of their salary in other trades throughout the local economy.
The Olympics has the generic depiction of different cultures,…