Industry Papers on Media, sport and entertainment
The Illusory Economic Gains from Hosting the Olympics & World Cup
, World Economics, March 2015
The IOC's Olympic Games and FIFA's World Cup are the two most popular global sporting events. Winning the rights to host these competitions comes with great fanfare. Yet except under special circumstances, the scholarly evidence suggests that hosting either event is no economic bargain for the host city or country. Short-run costs for venue construction and operations invariably exceed Games-related revenues by billions of dollars and long-term gains are elusive. The bidding process to host is structured such that a monopolist auctions off the rights to a world of competitors. The top bidder is likely to experience a winner's curse.
Why Russia Resists Facebook: Domestic social networking sites dominate in former Soviet Union
, World Economics, December 2013
The social media websites phenomenon started in 1997 with SixDegrees.com, which allowed users to create profiles, list their Friends and surf the Friends lists. Facebook launched in 2004 and became synonymous with the growth of this sector, exceeding 1.1 billion active users in 2013. Russia is, however, a major country with open-market access where Facebook has not been in a position to compete successfully with local service providers. This article examines the defining features of social networking sites and their growth potential worldwide, looks at the factors which influence their valuation and analyses unique features of the Russian market which have to date prevented Facebook’s expansion.
The New Transparency in Development Economics: Lessons from the Millennium Villages controversy
& Gabriel Demombynes
, World Economics, December 2013
The Millennium Villages Project is a high profile, multi-country development project that has aimed to serve as a model for ending rural poverty in sub- Saharan Africa. The project became the subject of controversy when the methodological basis of early claims of success was questioned. The lively ensuing debate offers lessons on three recent mini-revolutions that have swept the field of development economics: the rising standards of evidence for measuring impact, the ‘open data’ movement, and the growing role of the blogosphere in research debates.
Managerial Performance and Contract Instability in the Market for National Football Coaches
& Brian Sturgess
, World Economics, September 2007
In this paper, the authors investigate the relationship between managerial performance of national football coaches and their length of contract term to consider the extent to which relatively higher turnover may have affected team performance outcomes. The contract periods of coaches from the top twenty national teams during a thirteen year period from 1993 to 2006 are examined alongside their respective Fédération Internationale des Football Associations (FIFA) team performance rankings. The findings are evaluated in comparison with some of the main theoretical viewpoints traditionally relied upon to assess this phenomenon. The results suggest that broadening both theoretical and methodological approaches is needed to assess more adequately the complexity of these activities.
Hosting the FIFA World Cup: Economic boon or winner’s curse?
& Chris Brady
, World Economics, December 2006
Countries often compete fiercely for the right to host the football FIFA World Cup finals, but apart from national prestige, are there any concrete economic benefits to be gained from hosting sporting events such as the Olympics or the World Cup? The evidence is mixed. Many estimates suggest that large gains in employment and a boost to economic growth result. Some economists conclude that the net economic impact arising from a boost to aggregate demand is often negligible or even negative. This paper surveys a range of studies assessing the macroeconomic impact of hosting the finals. The authors argue that it is inappropriate to rely on measures of the economic impact that are concerned only with the effect on macroeconomic variables to decide whether a bid should be made or not, since hosting events can have major effects on the structures of the football market and related industries.
Do the Young British Artists Rule?: Evidence from the auction market
, World Economics, March 2006
In recent years, some English critics have claimed that Damien Hirst and his fellow young British artists have made London the new center of the advanced art world. As Hirst reaches the age of 40, this paper uses auction results to measure the importance of the YBAs compared to their American peers. Auction prices show that the YBAs do rule over their American rivals: both Hirst and Chris Ofili have had individual works sell for more than $1 million, a level no American artist under 40 has achieved. Whether London can continue its success will depend in part on whether it can match New York’s ability to attract important artists born in other countries.
Anticipating Artistic Success: Lessons from history
, World Economics, June 2005
The recent history of modern art provides clues as to how important artists can be identified before their work becomes generally known. Advanced art has been dominated by young conceptual innovators since the late 1950s, and theimportance of formal art education in the training of leading artists has also increased during this period. In the United States, a few schools have been particularly prominent. Auction market records reveal that during the past five decades the Yale School of Art has produced a series of graduates who have achieved great success commercially as well as critically. Recognizing Yale’s role can allow collectors to identify important artists before they become widely recognized, and therefore before their early innovative work rises in value.
A Portrait of the Artists as Young or Old Innovators: The creative life cycles of modern poets and novelists
, World Economics, December 2004
Earlier research found that great painters can be categorized either as young
geniuses, who make sudden conceptual innovations early in their careers, or as
old masters, who work experimentally, by trial and error, and arrive at their
greatest contributions late in their lives. This paper extends this analysis to
literature, and shows that the same dichotomy applies to both poets and
novelists. Thus great conceptual writers, including T. S. Eliot and F. Scott
Fitzgerald, have peaked early and declined thereafter, whereas great
experimental writers, such as Robert Frost and Virginia Woolf, have produced
their most important work later in their careers. The likelihood that both patterns
exist not only in all the arts, but in all intellectual activities, poses a challenge to
economists, who have not studied life cycles of creativity. Understanding the life
cycles of great innovators may help us to increase the contributions of some of
the most productive members of our society.
Pricing Cultural Heritage: A new approach to managing ancient resources
, Ece Ozdemiroglu
, Tannis Hett
& Giles Atkinson
, World Economics, September 2004
A growing determinant of leisure travel decisions has been the demand for
cultural destinations. This has presented complex challenges with regards to the
correct management of major cultural resources. Management options can be
assessed in terms of three criteria of performance: access, financial sustainability
and environmental sustainability. This paper shows that a promising means of
reconciling these desirable objectives is to harness the potential of economic
pricing strategies (such as entry charges), where data on willingness to pay for
visits are based on non-market valuation methods. A real-life illustration is
provided by examining the case of the Machu Picchu Historic Sanctuary in Peru.
It is shown that this approach can usefully inform expected changes in the entry
fee level and structure not just of Machu Picchu but cultural destinations and
resources more generally.
The Disappearing Masterpiece
, World Economics, December 2002
A quantitative analysis of the illustrations in art history textbooks reveals that the
most important modern American painters—including Pollock, de Kooning, and
Warhol—failed to produce individual paintings as famous as the masterpieces of
some major French modern artists, such as Manet, Gauguin, and Seurat. Yet art
historians do not consider the American artists to be less important and less innovative
than their French predecessors. The absence of American masterpieces
instead appears to be a consequence of market conditions, as changes over time
in the primary methods of showing and selling fine art effectively eliminated the
incentive for artists to produce important individual works. The study of markets
is essential to a full understanding of the development of modern art.
The Life Cycles of Modern Artists
, World Economics, September 2002
There have been two very different life cycles for great modern artists: some
have made their major contributions early in their careers, while others have
produced their best work later in their lives. These patterns have been associated
with different artistic goals and working methods: artists who peak late are
motivated by aesthetic considerations and work by trial and error, whereas artists
who peak early are motivated by conceptual concerns and plan their work in
advance. This paper applies this analysis to the careers of the leading members
from the two generations of painters who made New York the center of the art
world in the 1950s and ‘60s. The results not only yield a new understanding of
the life cycles of creative individuals, but also provide new insights into the
rationale behind the prices paid for works of art at auction.
The Promotion Test
, World Economics, June 2002
The collapse of broadcaster ITV Digital owing £178m to the English Football League will cause, according to the League’s Chairman, the financial failure of
up to fifty of the seventy two clubs. If this were to happen a major restructuring of English football would have to take place, including measures to make sure it could not happen again. This paper examines the underlying causes of the crisis and proposes a simple financial stability rule that would achieve this aim. The rule, which would deny promotion to any team spending over a fixed percentage (e.g. 70%) of its income on player wages, is designed to be a minimum intervention
in the operation of the football market, which has in fact worked well until now. The paper argues that because (a) financial stability is in consumers’ interests, (b) the proposed rule involves minimal intervention, and (c) since competition between clubs would remain intense, the rule would not be subject to competition law challenge.
The Economic Impact of the World Cup
, World Economics, March 2002
The World Cup will be the biggest sporting event of 2002, but the Japanese and
Korean governments are also hoping that it will be one of the biggest economic
events of the year. Impact studies by respected economic research institutes
predict a dramatic boost to GDP in both countries. This paper explains how
these forecasts are generated and explains the tendency for such forecasts to be
over-optimistic. The paper concludes with some policy recommendations for
governments and sporting bodies considering hosting such events.
Up for the Cup
, World Economics, December 2001
Measured by attendance of football fans, the FA Cup is in decline. This paper
reviews the evidence of this decline and suggests that the underlying cause may
be the growing imbalance of competition in the Cup. The paper considers the
drastic innovation that the FA introduced in 2001 to stem that decline: the
allocation of prize money. The prize money scheme is described and its likely
impact on the outcome of the competition is discussed.
A Night at the Opera: Subsidies, prices and repertoire at London’s opera houses
& Philip Wrigley
, World Economics, September 2001
This paper considers how the behaviour of the two London opera houses differs
from profit-maximisation, possibly in response to the high level of government
funding and private donations. The opera houses put on more innovative and
artistically rewarding operas than would be the case with profit-maximisation.
They also have clear access policies in offering low-price and discounted tickets.
Promotion and Relegation
& Stephen Ross
, World Economics, June 2001
One of the most distinctive differences between team sports in Europe and
North America is the institution of promotion and relegation. This paper looks
into the history of why this institution developed in Europe but not North
America, and considers what effects it may have on the competitive balance of the leagues. While dominance of the leagues by a small number of wealthy teams
is a more severe problem in Europe, its effects are mitigated by the opportunity
for new teams to enter from below and the excitement generated by the struggle
for survival among the weaker teams.
Can Bettors Win?: A perspective on the economics of betting
Leighton Vaughan Williams
, World Economics, March 2001
In this paper, a survey is undertaken of studies that examines the extent to which systematic patterns of behaviour in betting markets can generate above-average
or even abnormal returns, the latter being most conveniently defined for these
purposes as a profit. The paper concludes that although betting markets do tend
to process efficiently the information available to them, there are clear
opportunities to earn above-average returns. Moreover, there is significant
evidence that some bettors are able to profit by withholding and subsequently
utilising superior information.
The Market for Olympic Gold Medals
, World Economics, December 2000
From a national perspective the Sydney Olympics were almost completely predictable. Statistical modelling shows that population size and income per head provide an almost faultless method for identifying medal totals.
However, it is probably the discrepancies that are most interesting– why do some countries outperform and others underperform? Cheating, through drug abuse, is one possible explanation considered in this article.
The Political Economy of Sport
, World Economics, June 2000
The political constitutions of both the US and Europe provide no guidance on the role of organised sport in society. Without a proper set of rules politicians are
finding sports issues increasingly hard to handle. In the US there is widespread concern at the commercial exploitation of major league sports, particularly through the relocation of franchises. In Europe there are anxieties about the increasing polarisation of wealth and the fear that traditions built up over a century will be lost. These problems are not only likely to grow, but a new dimension will develop as sports bodies seek international expansion. In the future sports businesses may become a source of trade friction between the US and the European Union.