Comment on “The Long‐Term Impacts of the 1998 Nagano Winter Olympic Games on Economic and Labor Market Outcomes”

• DOI: http://doi.org/10.1111/aepr.12117
• Date: 01 January 2016
• Published date: 01 January 2016
• Author: Hiroaki Miyamoto

Comment on “The Long-Term Impacts of the

1998 Nagano Winter Olympic Games on

Economic and Labor Market Outcomes”

Hiroaki MIYAMOTO†

University of Tokyo

JEL codes: J21, L83, O11, O18, R53

What is the impact of the Olympic Games on an economy? Hosting an Olympic Games

potentially offers benefits for the economy of the host city or region. The benefits include

infrastructure construction related to the event, improved road or rail networks, con-

sumption by tourists, and job creation. However, there are also potential drawbacks of

hosting the event, such as high costs and underutilized facilities. Economists havestudied

the economic effects of the Olympic Games, but the existing empirical studies show

mixed results.

Miyoshi and Sasaki (2016) study the long-term effects of the 1998 Nagano Winter

Olympic Games on output and labor market outcomes in Nagano City and its neighbor-

ing areas. To estimate the impact of the Nagano Olympic Games on the local economy

and labor markets, they compare the actual outcomes caused by the Olympic Games

with a counterfactual outcome that would have been observed if the Olympic Game had

not been held. The counterfactual outcome is constructed by using the synthetic control

methodology developed by Abadie et al. (2010). Miyoshi and Sasaki find that the Nagano

Olympic Games induced population inflows into Nagano Prefecture and had a positive

impact on the local economy. They also find that the Nagano Olympic had no effect on

the local labor market.

Mega sports events, such as the Olympic Games and the World Cup, are expected to

have not only short-run effects, but also long-run effects on the economy. Miyoshi and

Sasaki (2016) place the long-run effects at center stage when they study the effect of

Nagano Olympic Games on the local economy and labor market. This is a valuable paper

for readers who are interested in economic effects of mega sports events. I have a few

comments on the analysis presented in the paper.

Miyoshi and Sasaki (2016) examine whether the Nagano Olympic Games has a

positive effect on the local GDP by comparing the actual and estimated synthetic

counterfactual trends in Nagano Prefecture’s GDP. Their analysis shows that the Nagano

Olympic Games had a positive impact on the local economy in the long run. However,

their analysis did not measure the size of the impact. Since we are interested in knowing

how much the event boosted the local economy, Miyoshi and Sasaki should measure the

size of the impact of the Nagano Olympic Games on the local GDP.

†Correspondence: Hiroaki Miyamoto,Graduate School of Public Policy, University of Tokyo, 7-3-1

Hongo Bunkyo-ku, Tokyo 113-0033, Japan. Email: miyamoto@pp.u-tokyo.ac.jp

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doi: 10.1111/aepr.12117 Asian Economic Policy Review (2016) 11, 68–69

© 2016 Japan Center for Economic Research68