MASTER THESIS – ERASMUS UNIVERSITEIT ROTTERDAM THE REALITY OF LEGACY URBAN TRANSFORMATION & THE ECONOMIC IMPACT OF THE LONDON 2012 OLYMPIC GAMES OLAOLUWA ADEBOYE STUDENT NO: 429581 Abstract The Reality of Legacy: Urban Transformation & the Economic Impact of the London 2012 Olympic Games is an academic Master thesis which explores the reality of the urban regeneration of East London as spurred by the 2012 Games. The dichotomous concept of Olympic legacy is evaluated from its linguistic beginnings at the Montreal 1976 Olympic Games to its centrality at the London 2012 Olympic Games. The overarching research question is: What is the reality of Olympic Legacy? This is supported by two further research questions. Firstly, it is asked how, as a conceptually broad, yet central tenant of the Olympics, how has legacy been exhibited in past Olympic Games? Thus, Section I is a qualitative analysis of the legacy of five landmark Olympic Games: Montreal, Los Angeles, Barcelona, Atlanta and Athens. The conclusion of Section I is that the historical evolution of legacy has been centred on its malleability and it is now inextricability intertwined with the modern Olympics; one cannot exist without the other, never more the case than with London 2012. Upon this rich foundation, rests the second research question: did the regeneration of Stratford as part of the London 2012 Olympic lead to direct benefit of the community as reflected through a change in local house prices? Section II thereby presents a quantitative study focusing specifically on the real estate market of the London Borough of Newham. A hedonic pricing model is built, using a range of house- and neighbourhood- characteristics for transactions between 2007 and 2015. It is concluded that there is a statistically significant proximity premium relating to the Queen Elizabeth Olympic Park extending to approximately 3km from the centre of the Park. Furthermore, there is evidence of negative externalities within the immediate proximity of the park and a positive influence on transaction prices as a result of the April 2014 reopening. The key findings of the study are discussed before the various limitations of the methodology employed are acknowledged. Lastly, the scope for further study is explored, particularly the need for retesting within a different spatial context in order to ensure the credibility of the statistical methods employed. 2 Acknowledgments I would like to thank Dr Erik Braun for his support and guidance as both a lecturer and supervisor. His enthusiasm for my topic was as encouraging as the advice provided throughout the task of writing this thesis. I would also like to express gratitude to the numerous research organisations who provided data without which I could not have completed the statistical analysis. Mr Leon Van der Vliet and Mr Vincent Seguin, the incomparable statistical knowledge possessed between the two of you was a blessing and I thank you both for the guidance during a crucial period of completing this thesis. Mr Jack Rodgers, your assistance when it came to the challenges of Excel was invaluable as well as your keen eye for detail. Lastly, I would like to thank the numerous friends who selflessly volunteered to proof read this piece of work. Miss Nina Gillespie, Mr Harry James Frost, Mrs Kathryn Belmont. To each of you I am ever grateful. You noticed spelling errors I’d grown blind to and the generosity you have shown is greatly appreciated. You helped me create a piece of work that I grew to be proud of and I thank you for that. 3 Table of Contents ABSTRACT ....................................................................................................................................... 2 ACKNOWLEDGMENTS ..................................................................................................................... 3 1. INTRODUCTION ...................................................................................................................... 6 1.2 RESEARCH QUESTIONS & AIM OF STUDY ........................................................................................ 8 2. SECTION I: A LITERATURE REVIEW ........................................................................................ 11 2.1 WELCOME TO OLYMPIA ............................................................................................................ 12 2.2 THE MODERN DAY OLYMPIC GAMES ........................................................................................... 13 2.3 LEGACY AND THE OLYMPIC GAMES ............................................................................................. 14 2.4 RESEARCH QUESTION I ............................................................................................................. 15 2.5 MONTREAL 1976 - THE 40-YEAR HANGOVER ............................................................................... 18 2.5.1 The Legacy of the Montreal Olympic Games - A Historical Context ................................... 18 2.5.2 The Reality of the Montreal Olympic Legacy - The Tendency to Accent the Positive .......... 18 2.5.3 The Balance of sport to non-sport legacy ........................................................................... 20 2.5.4 The Equity of the Montreal Olympic Legacy ....................................................................... 21 2.6 LOS ANGELES 1984 – SELLING THE FIVE RINGS .............................................................................. 21 2.6.1 The Legacy of the Los Angeles Olympic Games – A Historical Context ............................... 21 2.6.2 The Reality of the Los Angeles Olympic Legacy – The Tendency to Accent the Positive ..... 22 2.6.3 The Balance of sport to non-sport legacy ........................................................................... 24 2.6.4 The Equity of the Los Angeles Olympics .............................................................................. 24 2.7 BARCELONA 1992 – THE BIRTH OF THE GOLDEN AGE OF SPORT ........................................................ 25 2.7.1 The Legacy of the Barcelona Olympic Games – A Historical Context .................................. 25 2.7.2 The Reality of the Barcelona Olympic Legacy – The Tendency to Accent the Positive ........ 26 2.7.3 The Balance of sport to non-sport legacy ........................................................................... 27 2.7.4 The Equity of the Barcelona Olympics ................................................................................ 28 2.8 ATLANTA 1996 – “TASTE THE FEELING” ...................................................................................... 28 2.8.1 The Legacy of the Atlanta Olympic Games – A Historical Context ...................................... 28 2.8.2 The Reality of the Atlanta Olympic Legacy – The Tendency to Accent the Positive ............ 29 2.8.3 The Balance of sport to non-sport legacy ........................................................................... 30 2.8.4 The Equity of the Atlanta Olympic Games .......................................................................... 31 2.9 ATHENS 2004 – “A HOMECOMING” ........................................................................................... 32 2.9.1 The Legacy of the Athens Olympic Games – A Historical Context ....................................... 32 2.9.2 The Reality of the Athens Olympic Legacy – The Tendency to Accent the Positive ............. 32 2.9.3 The Balance of sport to non-sport legacy ........................................................................... 34 2.9.4 The Equity of the Athens Olympic Games ........................................................................... 34 2.10 CONCLUSION ........................................................................................................................ 35 2.10.1 Concluding Remarks ......................................................................................................... 35 2.10.2 London 2012 – A One Off Summer Wonder? .................................................................... 36 3. SECTION II: A STATISTICAL STUDY ............................................................................................. 39 3.1 RESEARCH QUESTION II ............................................................................................................ 39 3.2 METHODOLOGY ...................................................................................................................... 39 3.2.1 The Hedonic Pricing Model ................................................................................................. 40 3.2.2. Limitations and challenges of Hedonic Pricing Models ...................................................... 41 3.3 DATA DESCRIPTION ................................................................................................................. 41 4 3.3.1 Variables ............................................................................................................................. 42 3.4 DISTANCE (THE OLYMPIC EFFECT) ............................................................................................... 51 3.5 DATA STRUCTURE ................................................................................................................... 53 3.6 MULTIPLE TESTS ..................................................................................................................... 54 Multicollinearity ..........................................................................................................................