Consumption-boosting effects of the Tokyo Olympics and Paralympics

Tokyo Tower displays 2020 in Olympic lights

Author: Masayuki Morikawa, RIETI

We have only three years to go before the start of the 2020 Tokyo Olympics and Paralympics. Since the selection of Tokyo as the host city for the 2020 Summer Games, a series of agencies have released their estimates on the economic impact of the event. In what follows, I would like to shed light on some observed facts concerning points not fully taken into consideration in making such estimates. Specifically, I will focus on the following two factors: 1) the magnitude of the substitution effect, in which an increase in consumer spending induced by the Olympics and Paralympics will reduce consumer spending in other areas, and 2) the characteristics of consumers who are likely to increase consumption in net terms.

Read the entire article on the RIETI website.

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