Porter, P. & Fletcher, D. (2008). The

¶ … Porter, P. & Fletcher, D. (2008). The economic impact of the Olympic Games: Ex-Ante predictions and ex-poste reality Journal of Sport Management, 22, 470-486. A CPR analysis (context, purpose, research design) of Porter and Fletcher's article on "The economic impact of the Olympic Games" would note that the authors were conducting analyses of two past Olympics that took place in 1996 and 2000 to analyze the overall economic impact of the Olympic Games on two host American cities.

The purpose of the research was to examine the common claim that hosting the Olympics is an economic boon to the host nation. Alleged economic benefits are often used to justify the considerable expenses required to construct the necessary facilities and fund the needed city improvements to host the Games. However, the authors found that no such economic benefit was accrued by the host cities of the Olympics of the years they surveyed.

The research design was to use economic impact analysis that was modulated to mitigate distortions in certain price sectors which resulted in an over-estimation of the positive impact of the Games. "Surveys of spending by those who attend the event overstate the real impact of the event by incorporating increases in the price for inelastically-supplied final goods in the measure of real incremental demand" (Porter & Fletcher 2008: 485). Another method of evaluating a research article is called LOAF (limitations, observations, applications, findings).

The most obvious limitations of the article are that it focused upon only two years in the past. Every Olympic host nation is slightly different, and merely because these two cities (both of which were located in the U.S.) did not show a demonstrable benefit does not mean that this would universally be the case. An additional limitation is the purely economic analysis of the article: issues such as cultural capital and goodwill are not addressed.

For example, China was particularly eager to host the Olympics recently not simply because of a desired economic impact but to gain intangible benefits such as global legitimacy, despite the nation's human rights record. The article's observations focus not simply on the Olympics but also concerns about misapplications of the economic impact model, which they believe has overstated the potential economic benefits that are supposed to accrue from hosting the Games.

"The higher levels of aggregation typically found in regional [regional input-output] I-O models, together with improper measurement of regional purchase patterns or the region's industrial mix, can lead to errors in impact estimates of approximately 100%" for events such as the Olympics, "that draw huge audiences to a region for a short period of time.

Although the demand for regional products used for the event or by its patrons is easy to estimate and the I-O model can quickly produce a host of predictions (often mistakenly called measurements) about the impact of demand changes on the regional economy, it appears that the model's users fail to understand the nature of the application, using a long-run model to predict the consequences of a short-term event" (Porter & Fletcher 2008: 485).

The applications of the article analysis suggest that nations, particularly poorer nations, should not clamor to host the Olympics and should hosts not expect a widespread.