The Hand of Henry

According to the Volkskrant, each World Cup match of Oranje costs the Netherlands economy 130 mln euro — essentially because people sit around watching telly instead of working. Oranje has yet to sparkle, so there was limited joy to offset the loss in productivity.

Thanks to Henry, Ireland’s economy was spared a similar fate — although the Boys in Green certainly would have put in a better performance than les Bleus.

Comments

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18 thoughts on “The Hand of Henry”

  1. This calculation of course ignores the very essence of economics – that economic activity exists in order to satisfy people’s preferences.

    If the Dutch people prefer to sit on their orange-clad a%&*s and watch their team under perform once every four years, then the very laws of economics dictate that this is the highest and best use of their market-valued opportunity cost of labour.

    The Volkskrant could also calculate the millions of euros lost every day by the fact that lots of Dutch people spend time reading the Volkskrant, as opposed to sweating away producing whatever kind of widgets the Volkskrant deems to be ‘worthy economic product’.

  2. I certainly agree the loss of productivity in the Irish workplace was minimised due to Henry’s intervention.

    However, most football fans will have been keeping more than an eye on the competition as a whole so there must still be an effect.

  3. I would agree with the previous two comments! It seems harmless but perfectly inane to calculate how much a world cup costs participating nations. What, are the ducth to attempt not to qualify next time to ‘save’ mone 😉 The obsession to put an economic value on everything reminds me of college when a friend of mine began to study economics. For a while he spoke as if his handful of concepts of supply and demand and his smattering of econometrics could explain the universe. I happened to be reading Oscar Wilde at the time and chanced upon the quote about those who “know the price of everything and the value of nothing”.

  4. The April edition of the Journal of Economic Psychology includes the following paper:

    National well-being and international sports events
    Georgios Kavetsos, Stefan Szymanski

    The widely proclaimed economic benefits of hosting major sporting events have received substantial criticism by academic economists and have been shown to be negligible, at best. The aim of this paper is to formally examine the existence of another potential impact: national well-being or the so-called “feelgood” factor. Using data on self-reported life satisfaction for twelve European countries we test for the impact of hosting and of national athletic success on happiness. Our data covers three different major events: the Olympic Games, the FIFA World Cup and the UEFA European Championship. We find that the “feelgood” factor associated with hosting football events is large and significant, but that the impact of national athletic success on happiness, while correctly signed, is statistically insignificant.

  5. Sports Sentiment and Stock Returns
    Alex Edmans
    Diego García
    Oyvind Norli
    Journal of Finance Volume 62: Issue 4
    “This paper investigates the stock market reaction to sudden changes in investor mood. Motivated by psychological evidence of a strong link between soccer outcomes and mood, we use international soccer results as our primary mood variable. We find a significant market decline after soccer losses. For example, a loss in the World Cup elimination stage leads to a next-day abnormal stock return of −49 basis points. This loss effect is stronger in small stocks and in more important games, and is robust to methodological changes. We also document a loss effect after international cricket, rugby, and basketball games.”
    course, the blasted FTSE and the BVA in Mexico went UP today…..!

  6. @Dave,

    I know it’s the blogosphere, Dave, but please don’t be Ruud. The man’s name, in polite circles, is “Raphael van der Flaatulence.”

  7. Most of the of the slackers are probably in the public sector, so the output effect as measured by GDP will be minor.

    A classic econ 101 exam question!!

  8. Would the economic impact really have been the same in Ireland though? the article suggests the Oranje sit at home watching their national team play. The Irish tend to head down to the pub, thus spending money while watching.

  9. thought public sector workers were valued as per their wages so far as GDP is concerned. not sure if its before or after taxes though

  10. Tom Dunne (Newstalk 106-8) mentioned a new World Cup wine appropriately named “Fouconri”. Surely all of Ireland would buy such a product were it available.

    Just back from Utrecht NL where I watched both England/German and NL/Slovakia matches in an Irish pub. Still haven’t worked out the % divvy between the Dutch and Irish economies. But I can unreservedly recommend O’Leary’s pub for value and craic. Just say I sent you.

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