As the Summer Olympics are growing with larger media coverage and sponsorship, host cities have started to attach great importance to the tourism and other likely economic effects that occur by staging such a special event. As a result, a number of studies have been conducted to consider the various economic implications on the hosts. This paper examines and evaluates methods and assumptions used by the economic studies. It also compares ex-ante models and forecasts with the ex-post approach. The aim is to improve the information available to policy makers and potential future hosts of Summer Olympics and other megaevents.

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Through an event study methodology, the effect of the nomination of Athens as the hosting city for the Olympics of 2004 on the stock exchanges of Greece (winner) and Italy (loser), the two primary candidates for the Games is examined. Academic literature suggests that sporting mega events have a positive contribution to the host area economy. This implies that the stock exchange should react positively to the announcement of such events. Berman et al. (2000), in a similar study on the announcement of the Sydney 2000 Olympics, found no significant effect on the overall market and only limited effect on infrastructure-related companies based in the specific area hosting the Games. This study reveals a significantly positive effect on the Athens Stock Exchange (ASE) as a whole, as well as on infrastructure-related industries. No significant effect was identified on the Milan Stock Exchange (MSE). The differences in the impact of the announcement to economy size differences between the two countries and to the assessment is attributed to the fact that due to the highly competitive nature of the bidding process the financial markets assign higher probability to losing instead of winning.

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The 2004 Athens Olympic Games provided the host city with a unique challenge to ensure long-term benefits and to present itself worldwide as a modern, well designed and well run metropolis with infrastructure and state-of-the-art facilities, promoting the quality of life for its residents, as well as its economic and cultural development. The way however that the huge and costly sports facilities, unanimously acknowledged as a burden on the national economy and the Greek taxpayers, were to be used and exploited after the Games, became a headache to all post-games governments. The post-Olympic era was largely characterised by the incapability of the government to productively utilize the extensive infrastructure of the Olympic games. The bureaucracy and the lack of governmental long-term planning, left most venues unexploited and abandoned right after the games. Hellenic Olympic Properties (HOP), a government-controlled company responsible for making use of each of the Olympic venues after the games was extremely slow and inefficient in the utilization of its assets, while its annual published financial statements revealed consistently negative bottom lines. Seven years after the games, the reality is that the expected benefits from the post-Olympic use of the facilities to the Greek economy still remain to be seen.