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Let's talk about the Olympics
The costs are pretty trivial and it should go ahead.
Welcome to Plugging the Gap (my email newsletter about Covid-19 and its economics). In case you don’t know me, I’m an economist and professor at the University of Toronto. I have written lots of books including, most recently, on Covid-19. You can follow me on Twitter (@joshgans) or subscribe to this email newsletter here.
In six months time, the Summer Olympics are due to be held in Tokyo. They were postponed from last year due to Covid-19. But the pandemic is still with us raising doubts about whether the event will proceed. But, I am going to argue here that, on any reasonable analysis, the Olympic games can proceed safely and they should proceed. The costs are very low when you think about it correctly.
First things first, what do I mean by the Olympic games going ahead? I mean that the games themselves go ahead but in pretty much empty stadiums. That last part can change but it is irrelevant to my argument so I am going to assume it away. Given that, the way the Olympics happens is that all of the athletes, officials and the staff needed to support them during the event are vaccinated.
How many people do you need to stage an Olympics. In 2016, 11,238 people competed in the Olympics from 207 countries. That turns out to be the clearest figure we have. In Rio, the Olympic village housed 17,000 so that means that there was likely 6,000 odd officials, coaches and support staff who were needed. Then it gets harder. Even this comprehensive book on the economics of the Olympics served up no real numbers. In 2016, 80,000 security personnel were employed. There must be media, site workers and the like and those will all add up. I have no real basis to go on here as I could find no budget that clearly articulated employment numbers but let’s suppose that we have about 200,000 people employed just to get events running. So a working set of numbers if 20,000 visitors from other countries and 200,000 others to run an Olympics.
These are the people who need to be vaccinated. Although even that is an overstatement as a bubble-like testing regime could cover many of them. What are the costs of doing that. Well, all of these people will eventually be vaccinated so the cost is that you are prioritising them over others. Let’s take the participants. In the US, there is probably a contingent of 1,500 going to the Olympics. All of those people would have to be vaccinated now in order to ensure they are ready and also allow them to train easily. The US is vaccinating people at about 1.5 million per day. In other words, if you moved 1,500 people up the line, that would delay every single person in the US from receiving a vaccination by less than a minute. I am going to suggest that that is nothing. In other countries where vaccinations are not proceeding or are proceeding more slowly, the delay might look like it is more but that is only for those at the head of the line. This is because the vaccination rates are expected to pick up later on. Once again, this does not look like much.
In Japan, there is potentially an impact. Well, not really. Their plan is to have their entire population vaccinated by June. So some re-ordering of the queue does not seem to be a big issue there and they don’t have to start right now and can just ensure that a couple of months prior to the Olympics, the staff are vaccinated.
The objection to all of this is an argument that in many countries athletes will be unable to receive the vaccine because it isn’t available. To that, I note that the aggregate numbers are relatively low and they could be vaccinated by gifts from other countries. Put simply, there are very, very few people required to stage an Olympics. That drives the economics here.
What are the gains? For Japan, ticket sales are a small component of overall Olympic revenues (about $1 billion). So the economic returns are realised. Moreover, to the extent that the consumption of the Olympics has value in many countries, those benefits are realised too. Moreover, even in Japan, if the population is vaccinated, then even the stadiums can be filled. Tokyo hotels will also be filled by internal travel. to be sure, the overall economic returns won’t be the same but then again everyone knows that is a losing proposition for Olympic cities anyway. One thing for sure is that the losses are larger if you build the stadiums, upgrade infrastructure and expand accommodations only not to use them at all.
What is the alternative? There is some discussion of the Olympics being cancelled with Japan holding them in 2036 or something instead. There could be a delay of a year as well.
My argument here is that it should go ahead. At the very least the events and possibly with people in the seats but that is up to Japan. The vaccine means it can be made safe. The simple economics of the vaccine tell us the costs are vanishingly small. The gains are most of the value of the Olympics. You might think they don’t have value but the evidence suggests that most people disagree.
But there is also a bigger opportunity. The pandemic will still be with us in Summer. Continuing the Olympics is a breath of normality to an otherwise continuing crappy year. It is hard to think of other things with so minimal a cost that could achieve that. Moreover, to do all of this would require some international cooperation to make sure people from 200 plus countries receive vaccinations to make it possible. That is a good narrative. You could even fill the seats with elderly people from around the world who have been vaccinated as they had to spend most of 2020 isolated and in fear. Finally, doing this makes the marginal cost of hosting the para-Olympics even lower and so that could go ahead too.
Probably the best objection to this plan is: why the Olympics? Why not something else? To that I say, this is something. This can be done. It is better to have something than try and argue about what thing and get nothing which appears to be the current plan.