Thursday 29 April 2010

Sports and happiness

The economic benefits of hosting major sporting events are overblown at best. Today's BPS Research Digest suggests another motive: consumption benefits. They summarize work from the latest J Economic Psychology:
Kavestsos and Syzmanski looked for any changes in average life satisfaction scores in surveys that took place in the Autumn following the Olympics, Football World Cup or European Cup. Specifically, they wanted to know if a country doing better than expected in a competition had any benefial effect on average life satisfaction and/or whether hosting a competition had any benefits (the data available meant the latter question was restricted to the hosting of football events).

There was very little evidence that performing better than expected at a sports event had any positive benefit for the average life satisfaction scores of a country's citizens. The data moved in the right direction but with one exception the effects were not statistically significant. By contrast, there was strong evidence that hosting a major international football event boosted the life satisfaction of a host nation's citizens. Good news for South Africa.

Just how large was the life satisfaction increase for a typical citizen in a host nation? Kavetsos and Syzmanski said it was pretty big: three times the size of the happiness boost associated with gaining a higher education; one and half times the happiness boost associated with getting married; and nearly large enough to offset the misery triggered by divorce.

Is there a catch? Unfortunately, yes. By one year after the event, the benefits had gone, so the effects on people's happiness were extremely short-lived (the effects of marriage on happiness, by contrast, are long-lasting). There was also no evidence of a host country's happiness being boosted in anticipation of hosting an event.

'Most politicians calculate that hosting events can only enhance their political standing,' Kavetsos and Syzmanski said. 'This makes sense if the benefits of hosting are not derived through economic gains [which the research says don't exist], but through the feelgood factor, specifically associated with being the host.'
Consumption and fun do matter. I get disutility from these things but know that preferences vary. I just wish that these events would be sold as "hey, let's spend a pile of money and have a really big party" rather than on the basis of dodgy economic impact analyses that dress up consumption spending as investment.

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