Abstract
In this paper I assess the impact of the 2012 London Summer Olympic Games on health indicators of the local population. With the increasing cost of hosting the Games, it is demanded that the Olympic experience provides long-lasting benefits to the taxpayers that fund it; better health levels constitute an example of the expected legacy of the Games. I develop a microeconomic model to formally show that we expect an increase in demand for health due to lower costs resulting from the Olympics. To test this theoretical hypothesis, I exploit the exogenous infrastructure shock generated by the Olympics in the nearby boroughs with a difference-in-differences model, in search for improvements in mortality rates, smoking rates, child obesity rates, exercising rates and air pollution levels. To check for robustness in my regression results, I create multiple treatment group definitions and reproduce the experiment with a variety of areas of Olympic influence of different sizes. Evidence for higher quality of health is mixed: smoker rates and some air pollutant concentrations decreased, while child obesity, exercising and mortality rates did not change. There are two explanations for the lack of evidence of an Olympic impact that would fully satisfy the expectations of the British population. First, the study suffers from an unavoidable time horizon limitation: it is too soon to fully assess the effect of the Games because many of the expected changes are likely to take a long time to manifest. Second, London is a highly developed city and therefore experiences diminishing returns to increases in infrastructure. Cities in developing countries could benefit more from the Olympic experience, since it would provide the incentive to advance long-term projects and investments that are usually not prioritized in the political agenda.