Short answer

Designers and project managers should advocate for a broader definition of 'success' for major events, one that includes psychological and reputational gains alongside financial outcomes.

Field: Innovation & Markets
Source: Contemporary Economic Policy (2007)
Method: Ex post economic analysis and comparative case study.
Evidence: Moderate effect

While large sporting events like the World Cup often incur substantial costs with limited direct financial returns, the 'feel-good' factor and enhanced public image can provide significant, albeit harder to quantify, benefits. This innovation & markets research insight is drawn from a 2007 study published in Contemporary Economic Policy. Using Ex post economic analysis and comparative case study., researchers explored how this design variable affects real-world outcomes. The key design takeaway: Designers and project managers should advocate for a broader definition of 'success' for major events, one that includes psychological and reputational gains alongside financial outcomes.

Study

Innovation & MarketsHigh ImpactModerate effect

Mega-events rarely yield direct economic benefits, but intangible factors significantly influence perceived value.

Contemporary Economic Policy · 2007

Key Findings

01Traditional cost-benefit analyses rarely identify significant net economic benefits from hosting large sporting events.
02Intangible benefits such as 'feel-good' effects and improved public image are often underestimated in ex ante assessments but are crucial for overall perceived value.

Application

Design takeaway

Designers and project managers should advocate for a broader definition of 'success' for major events, one that includes psychological and reputational gains alongside financial outcomes.

How to apply

When proposing a large public event, conduct a dual analysis: one for direct financial costs and revenues, and another for potential impacts on national pride, international reputation, and social cohesion.

Project actions

01When researching a product or service, consider not just its functional benefits but also how it makes users feel or how it impacts their social standing.
02Think about how to measure or describe these 'softer' benefits in your design project.

Method & Evidence

AimWhat are the tangible and intangible economic impacts of hosting major international sporting events, and how can these be assessed for strategic decision-making?

MethodEx post economic analysis and comparative case study.

ProcedureThe study analyzed the financial costs and benefits of the 2006 World Cup in Germany, drawing lessons to inform the potential economic outcomes for South Africa hosting the 2010 World Cup. It specifically considered the limitations of traditional cost-benefit analyses in capturing intangible benefits.

ContextEconomics of major sporting events and national branding.

Variables

IVHosting a major sporting event.

DVDirect economic benefits (e.g., revenue, GDP impact) and intangible benefits (e.g., public image, national pride).

CVEconomic conditions of the host country, scale of the event, existing infrastructure.

Strengths & Limitations

Strengths

+Provides a critical perspective on the economic assumptions of mega-events.
+Introduces the importance of intangible benefits into economic analysis.

Limitations

It's hard to put a precise number on how much 'happiness' or 'pride' an event creates.

Reliability & validity

The findings are based on economic analysis of past events, making them somewhat reliable for similar future events. Validity is strong in identifying the gap in traditional analysis but may be limited in precisely quantifying intangible factors.

Think critically

How can designers effectively advocate for projects that have high intangible benefits but potentially lower direct financial returns?

Design Principles

"The perceived value of an event is a composite of tangible economic returns and intangible socio-psychological impacts."

Designers and strategists involved in planning or promoting large-scale events must look beyond purely financial metrics. Understanding and leveraging intangible benefits like national pride and improved global perception can be crucial for justifying investment and ensuring long-term stakeholder satisfaction.

What This Means for Your Design

Hosting big sports events costs a lot of money and usually doesn't make much direct profit. But, it can make people feel good about their country and make the country look good to the rest of the world, which is also important.

How to use in your project

1.Use this research to justify a design choice that might not be the cheapest but offers significant emotional or reputational benefits for the user or brand.

Add to My Project

Quick Cite

Paragraph starter

This research highlights that the success of large-scale initiatives is not solely determined by direct financial returns. Intangible benefits, such as enhanced public image and a sense of national pride, play a critical role in the overall perceived value and impact, suggesting that design projects should consider these qualitative aspects alongside quantitative metrics.

Source

Contemporary Economic Policy

WORLD CUP 2010: SOUTH AFRICAN ECONOMIC PERSPECTIVES AND POLICY CHALLENGES INFORMED BY THE EXPERIENCE OF GERMANY 2006

journal · 2007

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Questions About This Research

What does the research say about mega-events rarely yield direct economic benefits, but intangible factors significantly influence perceived value?: Designers and project managers should advocate for a broader definition of 'success' for major events, one that includes psychological and reputational gains alongside financial outcomes. Evidence: Contemporary Economic Policy (2007).
Why does "Mega-events rarely yield direct economic benefits, but intangible factors significantly influence perceived value." matter for design?: Designers and strategists involved in planning or promoting large-scale events must look beyond purely financial metrics. Understanding and leveraging intangible benefits like national pride and improved global perception can be crucial for justifying investment and ensuring long-term stakeholder satisfaction.
How can designers apply this research?: Designers and project managers should advocate for a broader definition of 'success' for major events, one that includes psychological and reputational gains alongside financial outcomes.
What were the main findings?: Traditional cost-benefit analyses rarely identify significant net economic benefits from hosting large sporting events.. Intangible benefits such as 'feel-good' effects and improved public image are often underestimated in ex ante assessments but are crucial for overall perceived value.
What research method was used?: Ex post economic analysis and comparative case study..
How strong is the evidence?: Evidence strength is rated Moderate effect, based on a 2007 journal from Contemporary Economic Policy.
What should I do differently in my next project?: When proposing a large public event, conduct a dual analysis: one for direct financial costs and revenues, and another for potential impacts on national pride, international reputation, and social cohesion.
What are the limitations?: Quantifying intangible benefits like 'feel-good' factors is inherently subjective and challenging.