Staging the 2024 Olympic in Los Angeles could generate up to 79,307 new, full-time mostly temporary jobs and as much as $11.2 billion in economic activity in Los Angeles, Olympic organizers announced Monday.
The $11 billion in spending would primary benefit Southern California's tourism industry, which includes hotels and restaurants and other tourist attractions.
The research, paid for by L.A.'s Olympic bid committee, also known as LA2024, will be included as part of the city's final submission to the International Olympic Committee on Feb. 3.
Beacon Economics and the University of California, Riverside's School of Business Center for Economic Forecasting and Development conducted the study, which also found that a 2024 Olympics in Los Angeles would generate an $18.3 billion economic impact nationwide.
However, such studies commissioned by event organizers should be treated with caution, according to Victor Matheson, a professor of economics at College of the Holy Cross and author of the recent paper "Going for the Gold: The Economics of the Olympics."
"It's awfully easy to come up with any number you want at the behest of your sponsor," said Matheson. "Given that the study was sponsored by the bid committee itself, you should take any results here with a grain of salt."
That being said, Matheson said, the methodology is mostly sound; This study doesn't make the common mistake of not taking into account the many tourists who would already visit Los Angeles in July of 2024 without the Olympics. The study actually projects a 3 percent decline in total visitors during the Olympics, but notes that the reduction in visitors would be offset by big spending from Olympic tourists. The report projects those visitors would spend twice as much as normal tourists.
Matheson was skeptical of one projection in the report: That a future Olympics in L.A. would create at least 74,000 new full-time jobs.
"In fact, in 1984 only about 5,000 new jobs were generated," he said. "So either this report is wildly optimistic, or this Olympics is going to be significantly different than the last time Los Angeles held the Games."
One of the economists who conducted the study, Robert Kleinhenz, executive director of research at Beacon Economics, responded: "Beacon has a reputation for impartial, objective and trusted analysis among private and public sector organizations. We have no interest in damaging our hard earned reputation by presenting questionable results in any study we conduct. Our report for LA2024 represents a rigorous economic analysis, and we stand by all our conclusions."
Matheson told KPCC optimistic economic impact studies are relatively harmless as long as they don't tempt politicians to overspend taxpayer money, which often happens with the Olympic Games and other big sporting events. L.A. organizers, however, are pitching a relatively low-cost Olympics that relies on existing facilities, something Mayor Eric Garcetti emphasized Monday.
"This report shows that L.A. is an ideal, low-risk host for the 2024 Games, and that we have the right plan in place to make sure that a winning bid brings a lasting Olympic legacy back to our city,” he said in a prepared statement.