Key Theme 4: London Olympics 2012

Introduction:
Hot topic and possible to consider within the Econ 1 framework although Econ 3 is more likely.

Economic Concepts
Private Cost: Direct costs of the project (estimated involved between £9bn and £12bn on construction venues, staffing and policing the event.
External Cost: Third party effects of the games such as increased congestion and other disruptions to normal routines during the construction and hosting of the games.
Private Benefit: Direct value extracted from the consumption of a good or service eg enjoyment from being there when Bolt runs the100m final
External Benefit: third party gains from the decision to produce and consume.  Multiplier effects of construction and investment, legacy notions of facilities and a new generation of fitter healthier people
Secondary Markets:  touts selling tickets above face value

Analysis;

• secondary markets

• External Costs

 

• External Benefits

 Evaluation

• In reality the picture is complex with the creation of short and long run externalities of consumption and production of a positive and negative nature.  Identifying them and attaching a value to them is an extremely difficult task.
• Ulitmately the costs could be considered to be relatively short term whilst the benefits in terms of the legacy of the games is relatively long term.
• Regionality of impacts is another issue all together.