Abstract
Large events have become an important and unique economic phenomenon. Although existing studies have assessed the total economic impact of a large event measured by gross domestic product (GDP), few studies have examined the welfare impacts of an event on local residents. To fill in this gap, this article builds a simple framework for assessing the economic welfare of a large event measured by Equivalent Variation. In this framework, extensions to modeling event investment and expenditure, such as event tourism expenditure and investment in the construction, are introduced to a standard computable general equilibrium model. The main critic for previous studies is that they always generate unrealistically large economic results. This framework attempts to overcome this by modeling investment in the event construction in a more reasonable method - modeling both positive and negative impacts. The framework is then applied to assessing the 2008 Beijing Olympics. Findings show that welfare gains generated in 2008 by holding the Beijing Olympics account for 0.33% and 7% of real GDP growth in China and Beijing, respectively. This implies that economic benefits in terms of welfare gains brought by holding the Beijing Olympics are not significant at both the national and city levels. Based on the model results, some policy implications are suggested.