the economic benefit of a world cup victory

04/16/2006 07:50:00 PM
We are just weeks away from one of the biggest global sporting events, the soccer World Cup, held in Germany this June.

It's an event that attracts billions of viewers worldwide, but other than being a sporting spectacle, does it hold any greater significance or importance?

This was the question economists at ABN-Amro tried to answer in the paper "Soccernomics"

The authors believe there is an economic effect that comes from winning or losing the cup. They analyzed the economic performance of past winners and losers, to discover, that on average World Cup winners see a .7% increase in their GDP, while losers have declines of .3% over the previous year. There's a simple explanation, a World Cup victory makes consumers happy and they go out and spend more as a result.

The paper concludes, that for the global economy to achieve the maximum benefit, the winner needs to come from Europe. It picks Italy because it's the country that's currently in the greatest need of an economic boost.

In addition to the rigor of economic study, they also put their computers to work and built a model that predicts a Brazilian win. For those of you that are interested, according to the computer, USA doesn't make it out of the group qualification stage and England get knocked out in the semi- final by Brazil.
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