School of Architecture, Urban Planning and Construction Engineering Master’s Degree in Management of Built Environment A.Y. 2019 - 2020 The intangible effects of hosting mega sporting events Contingent Valuation Method application to Rio 2016 Olympic Games Gli effetti immateriali dell'ospitare grandi eventi sportivi Applicazione del metodo di Contingent Valuation sui Giochi Olimpici Rio 2016 Supervisor: Prof. Andrea Caragliu Student: Lorenzo Caproni Co-supervisor: Prof. Giovanni Perucca Matricola: 927866 2 TABLE OF CONTENTS LIST OF FIGURES ...................................................................................................................... 4 LIST OF TABLES ........................................................................................................................ 4 RINGRAZIAMENTI .................................................................................................................... 6 PART I ...................................................................................................................................... 8 ABSTRACT ............................................................................................................................ 8 ASTRATTO ............................................................................................................................ 9 1. INTRODUCTION ............................................................................................................... 11 PART II .................................................................................................................................... 15 2. XXI CENTURY: BRAZILIAN MEGA EVENTS ....................................................................... 15 2.1 2004 Olympic Games bid ............................................................................................ 15 2.2 2007 Pan-American Games ........................................................................................ 17 2.3 2016 Rio Olympic Games bid ...................................................................................... 19 3. RIO 2016: REALIZATION PLAN ........................................................................................ 20 3.1 Urban regeneration.................................................................................................... 21 3.2 Four clusters areas .....................................................................................................23 3.3 Security and safety ................................................................................................... 26 3.4 Environment ............................................................................................................. 28 3.5 Mobility ..................................................................................................................... 30 3.6 Governance and budget ............................................................................................32 4. RIO 2016 ECONOMIC LEGACY ........................................................................................ 35 4.1 Expectations ............................................................................................................. 36 4.2 Numbers produced by Rio 2016 ................................................................................ 38 4.3 Short-term impact .................................................................................................... 40 4.4 Hidden and overrun costs ........................................................................................ 45 4.5 Public and private costs ............................................................................................ 47 5. SOCIAL IMPACT: FAVELAS EVICTION ............................................................................. 50 5.1 Dismantlement operations ....................................................................................... 50 5.2 The case of Vila Autódromo ...................................................................................... 55 PART III .................................................................................................................................. 60 6. CONTINGENT VALUATION: METHOD EXPLANATION .................................................... 60 6.1 Welfare economics and CV method .......................................................................... 60 6.2 Method application and purpose ............................................................................. 63 6.3 Socio - economical context ...................................................................................... 65 3 7. SURVEY OPEN-ENDED WTP ............................................................................................. 71 7.1 Survey structure .........................................................................................................72 7.2 Results analysis ......................................................................................................... 74 7.3 Not Answered WTP analysis ..................................................................................... 92 8. CONCLUSION ................................................................................................................. 93 BIBLIOGRAPHY ...................................................................................................................... 96 APPENDICES ......................................................................................................................... 104 APPENDIX A .................................................................................................................. 104 APPENDIX B................................................................................................................... 108 APPENDIX C ................................................................................................................... 109 LIST OF FIGURES Figure 1: Rio 2016 clusters .......................................................................................................23 Figure 2: Panoramic view of Barra de Tijuca .......................................................................... 25 Figure 3: Rio de Janeiro Olympic golf..................................................................................... 29 Figure 4: BRT corridors ........................................................................................................... 31 Figure 5: GDP per capita growth expressed in annual % ........................................................ 37 Figure 6: Vila Autódromo transformation .............................................................................. 57 Figure 7: Vila Autódromo new houses ................................................................................... 59 Figure 8: Rio de Janeiro macro areas ..................................................................................... 65 Figure 9: Income per capita distribution among Rio de Janeiro districts .............................. 70 Figure 10: Respondents' average income per capita .............................................................. 71 Figure 11: Map of respondents' residence areas .................................................................... 76 Figure 12: Evaluation scores about transport of the respondents ......................................... 78 Figure 13: Evaluation scores about tourism of the respondents ............................................ 80 Figure 14: WTP for one family - Answers distribution ............................................................ 80 Figure 15: WTP distribution in Rio's macro areas ................................................................... 84 Figure 16: School environment impact on the WTP ............................................................... 85 Figure 17: WTP and average Income comparison .................................................................. 87 LIST OF TABLES Table 1: New sport facilities in Barra de Tijuca ....................................................................... 24 Table 2: Expenditures estimates in 2015 with sources of funding.......................................... 34 Table 3: Budgeted revenue items ........................................................................................... 41 Table 4: ROCOG & non-ROCOG Costs .................................................................................... 43 Table 5: Non-ROCOG not directly attributed to the Games ................................................... 44 Table 6: Overrun costs trend from 2008 to 2016 ................................................................... 46 4 Table 7: Sources of funding per sport facility ........................................................................ 49 Table 8: List of families removed or threatened to be from their community ...................... 53 Table 9: Advantages and disadvantages of CV methods ....................................................... 64 Table 10: Demographic information of the respondents ....................................................... 75 Table 11: Geographical information of the respondents .........................................................77 Table 12: Transport habits of the respondents ...................................................................... 78 Table 13: Weighted average evaluation of transport ............................................................. 79 Table 14: One family WTP of the respondents ......................................................................