induced international tourism is the only type of expenditure directly related to the hosting of
the mega-event.
This particular study will focus primarily on the expenditure related to the first phase of the
2010 FIFA World Cup and its impact on the local economy. CGE analysis will then be used to
assess the impact of this increased infrastructure expenditure on key macroeconomic
variables such as output and employment.
2. Literature Review
The first economic impact study of hosting the Olympic Games, conducted for the Los
Angeles Games of 1984, was a direct result of the interest generated by reports that Montreal
declared a considerable financial deficit from the 1976 Games. Studies concerning sport
tourism have also proved popular in recent times. Ritchie and Adair (2002) found a growing
recognition of sport tourism as both a popular leisure experience and important economic
activity. The Los Angeles Sports and Entertainment Commission (2003) claimed that the
average economic impact on a city hosting a major sporting event was US$32.2 million, and
the Canadian Sport Tourism Alliance (2003) estimated that in excess of US$2 billion per
annum was generated by the sport tourism industry in Canada. Sports events have been the
focus of many economic impact studies since 1984, the most applicable of which are briefly
discussed below.
An economic impact study of the Rugby World Cup 2003 held in Australia by URS Finance
and Economics (2004) found that RWC2003 was estimated to have generated AU$494
million in additional industry sales, an additional AU$55 million in revenue to the
Commonwealth Government, and more than 4000 full- and part-time jobs during 2003. The
total contribution in additional Gross Domestic Product (GDP) to the Australian economy was
estimated at AU$289 million.
The economic impact study of the Sydney 2000 Olympic Games also held in Australia by the
Centre for Regional Economic Analysis (1999) estimated that over the twelve years ending in
2005/06 the Olympics is expected to increase New South Wales Gross State Product (GSP)
by an average of almost AU$490 million per year. The value of the impact on the Australian
GDP was estimated at AU$6.5 billion. This initial estimation was confirmed in a more recent
study by Madden (2002). CGE modelling techniques were used to simulate the impact on the
Australian economy in both the above mentioned studies.
Kim, Gursoy and Lee (2004) found that the impact of the 2002 FIFA World Cup on South
Korea was unsatisfactory from an economic perspective. The benefits of cultural exchanges,
and natural resources and cultural development were however found to be adequate. The