10 thoughts on “Monday Message Board

  1. The economics of Commonwealth Games and sporting contests in general seems to be mired in a lack of transparency. With the NSW government about to spend billions on sporting stadiums, when the backlog of maintenance for hospitals and schools has blown out, a cost-benefits analysis of big sporting events needs some attention. I understand that such big events provided supplementary benefits but surely they also impose large social costs. Still I cannot find any recent analysis on this area. It is a bit hard to debate on the advisability of spending taxpayers money (both in the short term and long run) on more sporting facilities without such information. My great grandfather was a state Minister for Queensland. My grandfather was also in the state government of Queensland. My mother tells me that both could only think in terms of the new projects that would cost lots of money. Perhaps it is our politicians who need to refocus on the micro management of the state’s schools and hospitals.

  2. Welcome to Panem! May the farce be ever against you. Panem et circenses or Bread and Circuses. The elites control us with bread and circuses. Here’s a good report on the American experience.

    Click to access 7c4b32ce43944be5d8535da5491e62231c89.pdf

    Professional sport is a vehicle for rent seeking by capitalists. Most of the spend on stadiums etc. is public money. It is a large net drain on society as worthwhile spending (on schools, hospitals, recreation/sporting facilities for children and non-professional-sports adults) is foregone. A classic case of opportunity cost.

    A couple of key excerpts from the report.

    “More than $21.7 billion will be spent on these 95 stadiums and arenas built or
    planned since 1990. Public coffers will contribute close to two-thirds of this amount.”

    “… independent work on the economic impact of stadiums and arenas has
    uniformly found that there is no statistically significant positive correlation between
    sports facility construction and economic development (Baade and Dye, 1990;
    Baim, 1992; Rosentraub, 1994; Baade, 1996; Noll and Zimbalist, 1997; Waldon,
    1997; Coates and Humphreys, 1999).

    These results stand in distinct contrast to the promotional studies that are typically
    done by consulting firms under the hire of teams or local chambers of commerce
    supporting facility development. Typically, such promotional studies project future
    impact and almost inevitably adopt unrealistic assumptions regarding local value
    added, new spending, and associated multipliers.”

  3. @Greg Pius
    Bent Flyvbjerg at Oxford does a lot of research on the economic value of mega projects and events more generally. His overall (and expected) conclusion is that they invariably don’t stack up when measured against the business case claims. Meantime, I am going to look at local spend in the Gold Coast over the period of the Games and compare it with the same time last year. It’s primarily to observe the impact on local traders (and uses bank data). I need to wait another 4-5 weeks to get the data but I’ll be posting it up as a story on my company blog (medium). It’s not quite what you are looking for, but I’m happy to point you to it if you’re interested.

  4. Kevin Johnson thank you for that I will be very interested in your findings. Having grown up on the Gold Coast during my school holidays I have seen many changes there both good and bad. I have a funny family tale that might amuse you. My Dad worked in Brisbane in the 1950s. He was having a drink with his mates when one of them offered him a chance to join a real estate syndicate. He asked what they would be investing in. His mate said “Surfers Paradise on the Gold Coast”. My Dad said “What that swamp. Not on your life.” My Dad could never pick good investment opportunities.

  5. @Greg Pius

    @Greg Pius
    Greg, interesting coincidence, he probably knew my dad who also was in real estate and used to take us to our home in Northcliffe most weekends too. Alas there is a high rise there now.
    Dad visited many pubs until 1954 when he gave up alcohol and was on call for the rest of his life through AA.
    Dad similarly dismissed as “rubbish” 200 acres of land his sister had inherited behind the Southport School which now includes the Benowa suburb.
    I avoid the Gold Coast like the plague bar the southern end like Rainbow Beach and Greenmount. Dad had all of us kids surfing from very young ages which activity I pursue still on the Sunshine Coast. I watch up here the encroaching development of high rise towards the beach and cannot see how anyone other than a corrupt councillor could describe them as beautiful.

  6. Electric buses: exhaustive report by BNEF for the C40 group of green cities at *****c40-production-images.s3.amazonaws.com/other_uploads/images/1726_BNEF_C40_Electric_buses_in_cities_FINAL_APPROVED_%282%29.original.pdf?1523363881
    1. This is now a mature as well as a rapidly growing market, with numerous suppliers of different bus types and charging options, and a lot of operator experience, not only in China (poster example Shenzhen’s 16,000 bus all-electric fleet). We are now seeing substantial orders outside China, such as 100 for Schiphol Airport and 60 for Oslo just in the last month. Suppliers of charging equipment have committed to standardisation, an important issue for residual value and the second-hand market.
    2. While sticker prices are still somewhat higher than for diesels (around a quarter), the total cost of ownership (TCO) is now at parity for most cities, from the much lower fuel and maintenance costs. Surprisingly, the comparison is most favourable for big cities with long routes. Going electric in buses is now a virtually costless green flag-waving option for mayors, with immediate benefits to air quality. BNEF think it will be some years before sticker prices fall to parity, but TCO is a more rational basis for decision-making.
    3. Buses represent a substantial share of the total demand for batteries, around a quarter. The aftermarket for used bus batteries will, according to BNEF, be so large that it could meet the entire predicted demand for grid battery storage in a decade. (!)

  7. Electric vehicle update. Q1-2018 sales of EV cars in China doubled YoY to 122,000. That’s 1.8% of the market, a slight drop from the 2.1% of all 2017, but those are not comparable periods. Everything suggests the Chinese EV boom, supported by strong policy from the Sun King in Beijing, will continue. There is nothing Trump can do to stop this: China is 40% of the world EV car market (and much more in buses). All he can do is make sure Tesla and GM lose out.

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