Viana, Jo ge H. N.; Ba bosa, An onio Vinicius; Sampaio, B eno
A icle
Does he Wo ld Cup ge he economic ball olling?
E idence om a syn he ic con ol app oach
EconomiA
P o ided in Coope a ion wi h:
The B azilian Associa ion o Pos g adua e P og ams in Economics (ANPEC), Rio de Janei o
Sugges ed Ci a ion: Viana, Jo ge H. N.; Ba bosa, An onio Vinicius; Sampaio, B eno (2018) : Does he
Wo ld Cup ge he economic ball olling? E idence om a syn he ic con ol app oach, EconomiA,
ISSN 1517-7580, Else ie , Ams e dam, Vol. 19, Iss. 3, pp. 330-349,
h ps://doi.o g/10.1016/j.econ.2018.05.001
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EconomiA
19
(2018)
330–349
Does
he
Wo ld
Cup
ge
he
economic
ball
olling?
E idence
om
a
syn he ic
con ol
app oach
Jo ge
H.
N.
Vianaa,∗,
An onio
Vinicius
Ba bosaa,
B eno
Sampaiob
aDepa men
o
Economics,
Uni e sidade
Fede al
da
Pa aíba,
Ja dim
Cidade
Uni e si a ia,
58059-356
João
Pessoa,
Pa aíba,
B azil
bDepa men
o
Economics,
Uni e sidade
Fede al
de
Pe nambuco,
Rua
dos
Economis as,
Cidade
Uni e si a ia,
50740-590
Reci e,
Pe nambuco,
B azil
Recei ed
30
No embe
2015;
ecei ed
in
e ised
o m
29
Ma ch
2018;
accep ed
9
May
2018
A ailable
online
16
May
2018
Abs ac
In
his
pape
we
analyze
he
impac
o
hos ing
he
FIFA
Socce
Wo ld
Cup
on
GDP
pe
capi a
in
a
wo ldwide
sample
o
coun ies
using
a
anspa en
s a is ical
me hodology
o
da a-d i en
case
s udies
–
he
syn he ic
con ol
me hod.
Using
coun y
le el
annual-
da a
co e ing
all
e en s
occu ing
in
he
pe iod
be ween
1978
(A gen ina)
and
2006
(Ge many),
we
show
ha
he
es ima ed
a e age
ea men
e ec
was
ei he
ze o
o
nega i e
o
all
bu
one
o
he
coun ies
analyzed.
Ou
esul s,
he e o e,
suppo
he
gene al
claim
ha
Wo ld
Cups
a e
no
s a is ically
associa ed
o
de elopmen
and
economic
g ow h.
JEL
classifica ion:
O4;
O5;
C50
Keywo ds:
Economic
g ow h;
Wo ld
Cup;
Syn he ic
con ol
me hod
P oduc ion
and
hos ing
by
Else ie
B.V.
on
behal
o
Na ional
Associa ion
o
Pos g adua e
Cen e s
in
Economics,
ANPEC.
This
is
an
open
access
a icle
unde
he
CC
BY-NC-ND
license
(h p://c ea i ecommons.o g/licenses/by-nc-nd/4.0/).
1.
In oduc ion
In
his
pape
we
use
coun y-le el
annual
da a
on
GDP
pe
capi a
o
analyze
he
impac
o
hos ing
he
FIFA
Socce
Wo ld
Cup
on
g ow h.
Fo
ha
we
use
he
syn he ic
con ol
me hod
o
cons uc
adequa e
coun e ac uals
o
all
coun ies
hos ing
he
e en
in
he
pe iod
be ween
1978
and
2006.
The
FIFA
(Fédé a ion
In e na ionale
de
Foo ball
Associa ion)
Socce
Wo ld
Cup
anks
among
he
h ee
la ges
e en s
in
he
wo ld,
oge he
wi h
he
Olympic
Games
and
he
Wo ld
Expo.
These
e en s
no
only
a ec
he
in lux
o
people/ ou ism
in
he
hos
coun y,
bu
also
in ol es
publicly
inanced
capi al
imp o emen
p ojec s
ha
a e
unde aken
o
imp o e
in as uc u e,
such
as
he
cons uc ion
o
new
and
he
imp o emen
o
old
s adiums
( o
he
pa icula
case
o
he
Wo ld
Cup),
oad
and
ai po
cons uc ion
and
imp o emen ,
among
many
o he s.
In
U uguay,
o
ins ance,
which
held
he
i s
edi ion
o
he
Cup
in
1930,
o al
a endance
was
li le
abo e
hal
million
spec a o s,
while
his
∗Co esponding
au ho .
E-mail
add esses:
jo ge[email p o ec ed].b
(J.H.N.
Viana),
[email p o ec ed]
(A.V.
Ba bosa),
[email p o ec ed]
(B.
Sam-
paio).
Pee
e iew
unde
esponsibili y
o
Na ional
Associa ion
o
Pos g adua e
Cen e s
in
Economics,
ANPEC.
h ps://doi.o g/10.1016/j.econ.2018.05.001
1517-7580
P oduc ion
and
hos ing
by
Else ie
B.V.
on
behal
o
Na ional
Associa ion
o
Pos g adua e
Cen e s
in
Economics,
ANPEC.
This
is
an
open
access
a icle
unde
he
CC
BY-NC-ND
license
(h p://c ea i ecommons.o g/licenses/by-nc-nd/4.0/).
J.H.N.
Viana
e
al.
/
EconomiA
19
(2018)
330–349
331
Table
1
FIFA
Wo ld
Cups.
Cup
yea
Yea
o
decision
o
hos
Hos
Numbe
o
eams
To al
a endance
1930
1929
U uguai
13
590,549
1934
1932
I aly
16
363,000
1938
1936
F ance
16
375,700
1950
1946
B azil
13
1,045,246
1954
1946
Swi ze land
16
768,607
1958
1950
Sweden
16
819,810
1962
1956
Chile
16
893,172
1966
1960
England
16
563,135
1970
1964
Mexico
16
1,603,975
1974
1966
Ge many
16
1,865,753
1978
1966
A gen ina
16
1,545,791
1982
1966
Spain
24
2,109,723
1986
1983
Mexico
24
2,394,031
1990
1984
I aly
24
2,516,215
1994
1988
USA
24
3,587,538
1998
1992
F ance
32
2,785,100
2002
1996
Ko a/Japan
32
2,705,197
2006
2000
Ge many
32
3,359,439
2010
2004
Sou h
A ica
32
3,178,856
Sou ce:
FIFA.
numbe
su passed
h ee
millions
in
wo
ecen
edi ions
held
in
Sou h
A ica,
wi h
3.178
millions
spec a o s
in
2010,
and
in
Ge many,
wi h
3.359
millions
in
2006
(see
Table
1).
The
amoun
o
in es men s
has
also
inc eased
subs an ially,
eaching
es ima es
in
he
o de
o
D
6
billion
o
bo h
Ge many
2006
and
Sou h
A ica
2010.
Besides
he
isks
and
high
cos s
in ol ed
in
hos ing
an
e en
o
his
magni ude,
all
p e ious
Wo ld
Cup
edi ions
ha e
had
la ge
compe i ion
be ween
po en ial
hos
coun ies
(FIFA,
2012).
Fo
example,
1930
Wo ld
Cup
had
six
candida es
(Hunga y,
I aly,
Ne he lands,
Spain,
Sweden
and
U uguay),
while
2018
and
2022
had
six
and
i e
candida es,
espec i ely.
This
beha io
clea ly
indica e
ha
coun ies
unde s and
ha
he e
a e
g ea
bene i s
in
hos ing
such
an
e en .
Common
a gumen s
ci ed
in
a o
o
such
decision
include
highe
economic
g ow h
a es,
educ ion
on
unemploymen
a es,
inc ease
in
ou is ic
ac i i ies
and
go e nmen
income,
inc ease
in
capi al
in low
and
an
imp o emen
o
he
image
o
he
coun y
wo ldwide.
The
a ionale
behind
hese
a gumen s
is
ha
he
Wo ld
Cup
en ails
no
only
in es men s
o
build
and
upda e
s adiums,
bu
also
a
lo
o
in es men
in
secu i y,
u ban
mobili y
and
ai po
in as uc u e.
Cu en
li e a u e
showing
empi ically
he
connec ion
be ween
he
Wo ld
Cup
and
he
a iables
ci ed
abo e
is
sca ce,
wi h
almos
all
pape s
published
on
he
subjec
ocusing
on
es ima ing
he
e ec
o
he
e en
on
economic
g ow h.
These
s udies
may
be
di ided
in o
wo
b oad
ca ego ies:
ex-an e
and
ex-pos
s udies.
The
i s
o
hese
ca ego ies
ocus
on
using
inpu -ou pu
ma ices
(ex-an e
analysis),
while
he
second
ocus
mainly
on
ime
se ies
o
di e ences-in-di e ences/ ixed
e ec s
models
(ex-pos
analysis)
o
es ima e
he
e ec
o
in e es .
The
esul s
p esen ed
o
bo h
ex-an e
and
ex-pos
s udies
could
no
be
mo e
di e se.
While
some
ex-pos
pape s
ind
posi i e,
insigni ican
o
e en
nega i e
e ec s
o
Wo ld
Cups
on
a iables
such
as
GDP,
unemploymen ,
go e nmen
ax
income
and
ou is
in low,
ex-an e
pape s
p edic
la ge
posi i e
e ec s
o
hese
same
a iables
when
analyzing
he
same
coun ies
conside ed
on
ex-pos
pape s.
Fo
example,
Bohlmann
and
an
Hee den
(2005),
using
a
Compu able
Gene al
Equilib ium
(CGE)
model
de eloped
speci ically
o
he
Sou h
A ican
economy,
p edic ed
ha
he
2010
Wo ld
Cup
held
in
Sou h
A ica
would
a ec
eal
GDP
in
excess
o
R10
billion
(abou
US$1.18
billion),
wi h
mo e
han
50,000
jobs
being
c ea ed
by
he
cons uc ion
o
new
enues
and
upg ading
o
exis ing
in as uc u e.
Addi ionally,
he
au ho s
concluded
ha
he
‘[e]xpec ed
imp o emen
o
he
in as uc u e
o
he
coun y,
especially
he
anspo
sec o ,
would
g ea ly
bene i
p oduc i i y
in
he
longe
e m
and
u he
inc ease
GDP.’
Mo ing
o
pape s
ha
pe o m
ex-pos
analysis,
Hagn
and
Maennig
(2008,
2009)
ound
insigni ican
o
nega i e
e ec s
o
Wo ld
Cups
on
unemploymen
using,
espec i ely,
da a
o
he
e en s
held
in
Ge many
in
he
yea s
o
1974
and
2006.
Fo
he
e en
held
in
he
US,
Baade
and
Ma heson
(2004),
using
da a
a
he
Me opoli an
S a is ical
A ea
(MSA)
le el,
ound
insigni ican
o
nega i e
e ec s
o
he
Wo ld
Cup
on
GDP
g ow h.
Finally,
Allme s
and
Maennig
(2009)
analyzed
he
e ec s
o
he
Wo ld
Cups
held
in
Ge many
2006
and
F ance
1998
on
o e nigh
s ays
a
ho els,
332
J.H.N.
Viana
e
al.
/
EconomiA
19
(2018)
330–349
na ional
income
om
ou ism,
and
e ail
sales
and
ound
ha
none
o
he
esul s
we e
s a is ically
signi ican
when
using
F ench
da a.
When
using
Ge man
da a,
howe e ,
hey
es ima ed
an
addi ional
700,000
o e nigh
s ays
and
US$900
million
in
ne
na ional
ou ism
income.
One
o
he
main
easons
why
ex-an e
s udies
end
o
epo
in la ed
numbe s
when
compa ed
o
ex-pos
s udies
is
ha
hey
do
no
ake
in o
accoun
ha
mos
o
he
in es men
in ol ed
in
a
Wo ld
Cup
is
no
new
money
en e ing
he
economy,
bu
esou ces
aken
om
o he
sec o s
in
which
hey
could
ha e
o he wise
induced
la ge
economic
bene i s.
In
addi ion,
a
g ea
pe cen age
o
he
e en
a endance
include
local
esiden s,
and
his
is
pa icula ly
ue
o
Wo ld
Cups
in
coun ies
wi h
g ea
adi ion
in
oo ball.
Also,
a endance
include
people
who
would
ha e
isi ed
he
hos
coun y
e en
i
he e
was
no
e en .
The e o e,
as
a gued
by
C omp on
(1995),
one
ough
o
expec
he
boos
obse ed
in
ou ism
o
be
no
as
la ge
as
he
numbe s
p edic ed
by
ex-an e
models.
Mos
pape s
in
his
li e a u e,
howe e ,
migh
su e
om
he
consequences
o
he
well
known
‘ undamen al
p oblem
o
causal
in e ence’
(Holland,
1986),
which
imposes
an
addi ional
challenge
o
empi ical
esea che s
when
es ima ing
causal
e ec s
o
policy
changes.
This
p oblem
exis s
due
o
he
ac
ha
compa isons
o
wo
ou comes
o
in e es
o
he
same
uni
when
exposed,
and
when
no
exposed,
o
a
ea men
is
an
in easible
ask,
gi en
he
same
uni
can
ei he
pa icipa e
o
no
in
a
p og am
in
he
same
pe iod
(Imbens
and
Woold idge
2009).
In
o he
wo ds,
one
can
ne e
obse e
a
speci ic
coun y
when
unde
and
when
no
unde
he
in luence
o
a
Wo ld
Cup
a
he
same
poin
in
ime
(Sampaio,
2014).
Hence,
es ima es
based
on
inpu /ou pu
ma ices
o
imes
se ies
models
(o
e en
di e ences-
in-di e ences
models
unde
he
p esence
o
ime- a ying
unobse able
con ounde s)
a e
only
alid
unde
s ong
assump ions
ega ding
shocks
ha
a e
co ela ed
o
he
policy
being
e alua ed.
In
his
pape ,
we
mo e
away
om
he
me hods
p e iously
used
o
s udy
he
subjec ,
which
o
he
mos
pa
ely
on
he
assump ion
o
selec ion
on
obse ables,
and
p opose
o
use
he
syn he ic
con ol
me hod
(SCM),
a
echnique
which
gained
popula i y
ecen ly
and
is
well
sui ed
o
s udy
he
p oblem
add essed
in
his
pape .
This
me hod,
which
was
de eloped
by
Abadie
and
Ga deazabal
(2003)
and
ex ended
by
Abadie
e
al.
(2010),
uses
da a-d i en
p ocedu es
o
cons uc
adequa e
compa ison
g oups/coun e ac uals
gi en
ha ,
in
p ac ice,
i
is
a
di icul
ask
o
ind
a
single
uni /coun y
unexposed
o
he
policy
change
o
in e es
ha
app oxima es
he
mos ,
ele an
cha ac e is ics
o
he
ea ed
uni
( he
coun y
ha
had
a
Wo ld
Cup,
o
example)
and
ha
would
p o ide
a
good
con ol
g oup.
In
o he
wo ds,
he
me hod
will
p o ide
he
esea che
wi h
an
op imal
weigh
o
each
coun y
such
ha
he
weigh ed
a e age
o
he
a iable
one
is
in e es ed
in
explaining
(in
ou
case,
GDP
pe
capi a)
bes
app oxima es
he
alue
o
his
a iable
o
he
coun y
ha
had
he
policy
change
(in
ou
case,
hose
coun ies
hos ing
a
Wo ld
Cup).
Acco ding
o
Belo
and
Vandenbe ghe
(2009),
he
basic
in ui ion
behind
he
SCM
is
ha
a
combina ion
o
coun ies
–
a
syn he ic
con ol
–
o e s
a
be e
compa ison
han
any
single
coun y
alone.
A
second
ad an age
o
he
p oposed
me hod,
as
highligh ed
by
Billmeie
and
Nannicini
(2013),
is
ha ,
unlike
mos
o
he
es ima o s
used
in
he
li e a u e
o
p og am
e alua ion
and
in
he
li e a u e
analyzing
e ec s
o
wo ld
cups,
i
can
deal
wi h
endogenei y
om
omi ed
a iable
bias
by
accoun ing
o
he
p esence
o
ime- a ying
unobse able
con ounde s.
This
is
a
signi ican
imp o emen
conside ing
p e ious
analysis
using
imes
se ies
and
ixed
e ec s
models,
which
can
only
accoun
o
ime-in a ian
unobse able
con ounde s.
This
me hodology
was
ecen ly
used
by
Abadie
e
al.
(2010)
o
analyze
he
e ec s
o
P oposi ion
99,
a
la ge-scale
obacco
con ol
p og am
ha
Cali o nia
implemen ed
in
1988,
on
obacco
consump ion
using
annual
s a e-le el
panel
da a
o
he
pe iod
1970–2000;
by
Belo
and
Vandenbe ghe
(2009)
o
analyze
he
e ec s
o
g ade
e en ion
on
a ainmen
using
a
e o m
in oduced
in
2001
in
he
F ench-Speaking
Communi y
o
Belgium
whe eby
he
possibili y
o
g ade
e en ion
in
g ade
se en
was
ein oduced;
by
Billmeie
and
Nannicini
(2013)
o
analyze
he
impac
o
economic
libe aliza ion
on
eal
GDP
pe
capi a
in
a
wo ldwide
sample
o
coun ies
using
annual
da a
co e ing
abou
180
coun ies
o e
he
pe iod
1963–2000;
and
by
Sampaio
(2014)
o
analyze
he
e ec s
o
New
Yo k
s a e’s
law
p ohibi ing
handheld
cell
phone
use
while
d i ing
on
a ali y
a es
using
annual
s a e-le el
panel
da a
o
he
pe iod
o
1995–2006.
The e o e,
gi en
he
ad an ages
o
he
SCM
ega ding
he
s uc u e
o
he
da a
and
he
ins i u ional
amewo k
o
he
p oblem
being
analyzed
in
his
pape ,
we
see
he
SCM
as
a
p omising
s a egy
o
o e come
some
o
he
sho comings
o
p e iously
p oposed
me hods
and
as
a
decen
ins umen
o
analyze
he
impac
o
la ge
spo ing
e en s
on
mac oeconomic
a iables.
Ano he
con ibu ion
o
ou
pape
ela es
o
he
numbe
o
e en s
conside ed
in
he
analysis.
Wi h
only
one
excep ion
(Allme s
and
Maennig,
2009),
all
pape s
es ima ing
he
e ec s
o
wo ld
cups
look
only
a
one
e en .
In
his
a icle,
we
expand
p e ious
esea ch
and
o e
a
se
o
empi ical
coun y
s udies
o
bes
analyze
he
ela ionship
be ween
he
e en s
and
he
pa e n
o
income
pe
capi a.
We
conside
a
o al
o
8
e en s
held
in
9
coun ies,
co e ing
all
Wo ld
Cups
occu ing
in
he
pe iod
be ween
1978
(A gen ina)
and
2006
(Ge many).
J.H.N.
Viana
e
al.
/
EconomiA
19
(2018)
330–349
333
Ou
empi ical
indings
show
ha
o
all
he
coun ies
conside ed
in
he
analysis
(Ge many,
Japan,
Ko ea,
F ance,
Uni ed
S a es,
I aly,
Mexico,
Spain
and
A gen ina),
he
Wo ld
Cup
had
a
null
o
a
nega i e
e ec
on
income
pe
capi a.
We
should
emphasize
ha
p e- ea men
adjus men
be ween
eal
and
syn he ic
con ol
o
he
majo i y
o
coun ies
ci ed
abo e
was
qui e
good,
wi h
eal
GDP
ime
se ies
almos
o e lapping
ha
o
syn he ic
GDP
ime
se ies,
which
alida es
de
exe cise
being
ca ied
ou .
Fo
Spain,
howe e ,
he
syn he ic
con ol
p esen ed
a
poo
p e- ea men
i ,
which
implies
ha
a
sui able
coun e ac ual
was
no
ound
and
his
educes
he
in e en ial
alue
o
his
speci ic
expe imen .
The e o e,
ou
esul s
suppo
he
gene al
conclusion
ha
Wo ld
Cups
a e
no
s a is ically
associa ed
o
economic
g ow h.
Looking
a
i s
mos
ecen
edi ion
(2014
Wo ld
Cup
in
B azil),
C espo
(2014)
es ima ed
ha
o al
o eseen
cos
o
he
Cup
would
be
abou
R$
26
billion,
wi h
‘only’
R$
8
billion
spen
in
s adiums
(31%
o
he
o al
expenses)
and
R$
13
billion
(50%
o
he
o al)
spen
in
u ban
mobili y
and
ai po
in as uc u e.
Ne e heless,
despi e
hese
la ge
absolu e
numbe s,
o al
o eseen
cos
o
he
2014
Wo ld
Cup
is
s ill
a
d op
on
he
ocean
when
compa ed
o
he
huge
public
budge
o
B azil
( o
example,
i
ep esen s
only
9%
o
o al
annual
cos s
on
public
educa ion,
as
no ed
by
Pa u
e
al.,
2014).
The e o e,
besides
he
Cup
being
a
huge
spo ing
e en ,
i
appea s
no
o
ha e
he
economic
impo ance
as
many
a gue
o
ha e.
Mo eo e ,
as
inpu -ou pu
s udies
end
o
o ge ,
mos
o
hese
so
called
in es men s
ha
a ise
once
he
coun y
is
assigned
as
hos
a e
no
new
esou ces,
bu
a e
in
ac
ealloca ed
esou ces.
The e o e,
hese
wo
aspec s
aken
oge he
cas
se ious
doub
on
he
possible
bene i s
o
hos ing
such
an
e en .
A e
his
in oduc ion,
he
es
o
he
pape
is
o ganized
as
ollows.
Sec ion
2
desc ibes
in
de ail
he
syn he ic
con ol
app oach
o
compa a i e
case
s udies
o
agg ega e
e en s.
In
Sec ion
3
he
da a
used
is
p esen ed
and
in
Sec ion
4
esul s
a e
discussed.
Finally,
a
ew
concluding
ema ks
a e
d awn
in
Sec ion
5.
2.
Me hodology
In
his
sec ion
we
p esen
he
empi ical
s a egy
used
o
iden i y
he
causal
e ec
o
hos ing
a
Wo ld
Cup
on
he
ou comes
o
in e es .
Le
Yc be
he
ou come
o
coun y
ca
ime
,
WCc be
a
dummy
a iable
ha
assumes
alue
equal
o
1
o
he
yea s
ollowing
he
occu ence
o
a
Wo ld
Cup
(o
ollowing
he
announcemen
o
he
hos ing
coun y),
and
εc be
unobse ed
de e minan s
o
he
ou come
a iable.
The
pa ame e
o
in e es ,
β1,
which
ep esen s
he
e ec
o
he
Wo ld
Cup
on
he
ou come,
may
be
es ima ed
ia
he
ollowing
model
Yc =
β0+
β1∗
WCc +
εc (1)
One
can
easily
e i y
ha
by
es ima ing
equa ion
1
using
da a
only
o
he
coun y
ha
had
a
Wo ld
Cup,
he
pa ame e
o
in e es
would
equal
he
a e age
o
he
ou come
a iable
a e
he
Wo ld
Cup
(when
WCc =
1)
minus
he
a e age
o
he
ou come
a iable
be o e
he
Wo ld
Cup
(when
WCc =
0).
I
is
ha d
o
a gue,
howe e ,
ha
such
di e ence
ep esen
he
causal
e ec
o
he
Wo ld
Cup,
gi en
ha
o he
con ounding
ac o s
no
con olled
o
ha
migh
comp omise
iden i ica ion,
ha
is,
i
migh
be
ha
COV (WCc ,
εc )/=
0.
To
o e come
he
p oblems
desc ibed
abo e,
he
usual
p ac ice
in
his
li e a u e
has
been
o
use
da a
on
ano he
coun y
(o
many
o he
coun ies)
ha
did
no
hos
any
Wo ld
Cup
du ing
he
yea s
be o e
o
a e
he
coun y
cu en ly
hos ing
he
Wo ld
Cup.
These
coun ies
would
hen
be
used
as
coun e ac uals
o
he
coun y
being
analyzed
and
he
pa ame e
o
in e es
would
be
iden i ied
ia
a
di e ence-in-di e ences
(DID)
se up.
This
s a egy
would
emo e
bias
ha
migh
esul
om
pe manen
di e ences
be ween
he
coun y
hos ing
he
Wo ld
Cup
and
o he
coun ies
used
as
coun e ac uals,
as
well
as
bias
om
compa ison
o e
ime
in
he
coun y
ha
had
he
Wo ld
Cup
ha
could
be
he
esul
o
ime
ends
un ela ed
o
he
Wo ld
Cup
i sel
(Imbens
and
Woold idge,
2009).
In
his
case,
he
equa ion
o
be
es ima ed
is
gi en
by
Yc =
α0+
α1∗
WCc +
ΘXc +
λc+
λ +
μc (2)
whe e
Xc is
a
ec o
o
con ols,
and
λcand
λ a e,
espec i ely,
coun y
and
yea
ixed
e ec s
o
con ol
o
coun y
ime-in a ian
unobse able
cha ac e is ics
and
o
yea ly
di e ences
be ween
he
ou come
o
in e es .
The
pa ame e
o
in e es ,
α1,
equals
he
a e age
gain
o e
ime
in
he
coun ies
no
hos ing
a
Wo ld
Cup
minus
he
a e age
gain
o e
ime
in
he
coun y
hos ing
he
Wo ld
Cup.
One
main
hypo hesis
equi ed
o
he
alidi y
o
his
app oach
in
iden i ying
he
Wo ld
Cup
e ec ,
is
ha
bo h
ea ed
and
con ol
coun ies
mus
ha e
exac ly
he
same
ime
end
in
he
absence
o
he
Wo ld
Cup,
and
i
is
no
clea
why
his
should
be
he
case.
I ,
o
example,
he
coun ies
no
hos ing

334
J.H.N.
Viana
e
al.
/
EconomiA
19
(2018)
330–349
a
Wo ld
Cup
ha e
di e en
ends
compa ed
o
he
coun y
hos ing
he
Wo ld
Cup,
he
esea che
will
be
unable
o
di e en ia e
be ween
he
Wo ld
Cup
e ec
and
he
end
di e ence.
This
sho coming
is
exac ly
wha
we
aim
o
o e come
in
he
p esen
pape
by
using
he
syn he ic
con ol
me hod
o
cons uc
a
combina ion
o
coun ies
ha
bes
desc ibes
p e- ea men
a iables
o
he
coun y
hos ing
he
Wo ld
Cup,
i.e.,
his
a i icially
cons uc ed
g oup
is
simila
o
he
ea ed
coun y
in
he
p e- ea men
pe iods
han
any
o
he
con ol
coun y
on
hei
own.
2.1.
The
syn he ic
con ol
me hod
(SCM)
In
his
sec ion
we
desc ibe
he
syn he ic
con ol
me hod
(SCM)
de eloped
by
Abadie
and
Ga deazabal
(2003)
and
ex ended
in
Abadie
e
al.
(2010).
We
also
discuss
i s
ad an ages
and
limi a ions
when
compa ed
o
o he
me hodologies
used
in
he
li e a u e,
paying
pa icula
a en ion
o
DID
s a egies.
Suppose
he e
a e
J
+
1
egions/coun ies
and
ha
only
he
i s
egion
is
exposed
o
he
policy
change
( he
coun y
hos ing
he
Wo ld
Cup),
so
ha
he e
a e
J
emaining
egions
as
po en ial
con ols
(all
o he
coun ies
no
hos ing
Wo ld
Cups
in
he
pe iod
nea
he
one
being
analyzed).
Le
YN
c be
he
ou come
ha
would
be
obse ed
o
egion
c
a
ime
in
he
absence
o
he
in e en ion,
o
uni s
c
=
1,
.
.
.,
J
+
1,
and
ime
pe iods
=
1,
.
.
.,
T.
Le
YI
c be
he
ou come
ha
would
be
obse ed
o
uni
c
a
ime
i
uni
c
is
exposed
o
he
in e en ion
in
pe iods
T0+
1
o
T,
whe e
T0is
he
numbe
o
p e-in e en ion
pe iods
such
ha
1
≤
T0<
T.
I
is
assumed
ha
he
in e en ion
has
no
e ec
on
he
ou come
o
in e es
be o e
he
implemen a ion
pe iod,
such
ha
o
∈
1,
.
.
.,
T0and
all
c
∈
1,
.
.
.,
N
we
ha e
ha
YI
c =
YN
i .
Now
le
αc =
YI
c −
YN
c he
e ec
o
he
in e en ion
o
uni
c
a
ime
,
and
le
Dc be
an
indica o
ha
akes
alue
one
i
uni
c
is
exposed
o
he
in e en ion
a
ime
,
and
ze o
o he wise.
In
his
case,
he
obse ed
ou come
o
uni
c
a
ime
is
gi en
by
Yc =
YN
c −
αc Dc .
Fo
egion
one,
which
is
he
only
egion
exposed
o
he
in e en ion
a e
pe iod
T0,
i
ollows
ha
Dc =
1
o
>
T0and
ze o
o he wise.
Ou
objec i e
is
o
es ima e
(α1T0
+
1),
which
is
gi en
by
α1 =
YI
1 −
YN
1 =
Y1 −
YN
1 .
The
p oblem
in
es ima ing
α’s
in
his
case
is
ha
YN
c is
ne e
obse ed
o
he
ea ed
egion
once
>
T0.
Thus,
one
mus
es ima e
i s
alue.
To
see
how
a
con ol
g oup
migh
be
ob ained
om
he
se
o
un ea ed
egions,
suppose
as
in
Abadie
e
al.
(2010)
ha
YN
c is
gi en
by
he
ollowing
model
YN
c =
δ +
θ Zc+
λ μc+
εc (3)
whe e
δ is
an
unknown
common
ac o
wi h
cons an
ac o
loadings
ac oss
uni s,
Zcis
a
ec o
o
obse ed
co a ia es
(no
a ec ed
by
he
in e en ion),
θ is
a
ec o
o
unknown
pa ame e s,
λ is
a
ec o
o
unobse ed
common
ac o s,
μcis
an
ec o
o
unknown
ac o
loadings,
and
he
e o
e ms
εc a e
unobse ed
ansi o y
shocks
a
he
egion
le el
wi h
ze o
mean.
Now
conside
a(J
×
1) ec o
o
weigh s
W
=(w2,
.
.
.,
wJ+1)such
ha
wj≥
0
o
j
=
2,
.
.
.,
J
+
1
and
w2+
.
.
.
+
wJ
+
1=
1.
Each
alue
ha
W
migh
ake
ep esen s
a
syn he ic
con ol
g oup
o
egion
one.
Fo
exam-
ple,
i
w2=
1
and
wj=
0
o
3,
.
.
.,
J
+
1,
hen
egion
2
wo ks
as
con ol
o
egion
one
( he
ea ed
one).
I ,
on
he
o he
hand,
one
se s
a
subse
J⊂
J
o
ha e
equal
weigh s,
such
ha
w
j=1
J o
j
∈
J
and
0
o he wise,
he
compa ison
would
be
be ween
he
ea ed
egion
and
he
a e age
o
all
o he
egions
ha
belong
o
he
g oup
J.
Using
W
as
weigh s
o
cons uc
a
weigh ed
a e age
o
Eq.
(3),
one
ob ains
he
ollowing
exp ession
j+1

J=2
wjYj =
δ +
θ
j+1

J=2
wjZj+
λ
j+1

J=2
wjμc+
j+1

J=2
wjεj (4)
J.H.N.
Viana
e
al.
/
EconomiA
19
(2018)
330–349
335
I
one
assumes
ha
exis s
weigh s w∗
2,
.
.
.w∗
J+1such
ha
he
ollowing
holds, j+1
J=2wjYj =
Y11,
.
.
., j+1
J=2w∗
jYjT0=
Y1T0and j+1
J=2w∗
jZj=
Z1 hen
Abadie
e
al.
(2010)
p o e
ha
he
ollowing
equa ion
is
ue
YN
1 −
j+1

J=2
w∗
jYj =
j+1

J=2
wj
T0

s=1
λ T0

n=1
λ
nλn−1
λ
sεjs −
ε1s−
j+1

J=2
w∗
jεj −
ε1 (5)
and
ha
i s
igh
hand
side
will
be
close
o
ze o
i
he
numbe
o
p e-in e en ion
pe iods
is
la ge
ela i e
o
he
scale
o
he
ansi o y
shocks.
This
implies
ha
YN
1 =j+1
J=2w∗
jYj which
sugges s
he
ollowing
es ima o
o
he
α
ec o :
ˆ
α
=
Y1 −
j+1

J=2
w∗
jYj (6)
To
ob ain
he
ec o
o
op imal
weigh s
W,
le
X1=Z
1,
Y11,
.
.
.,
Y1T0be
a
ec o
o
p e-in e en ion
cha -
ac e is ics
o
he
ea ed
egion
an
X0be
a
ma ix
ha
con ains
he
same
a iables
o
he
un ea ed
egions,
such
ha
he
j h
column
o
X0is Z
j,
Yij ,
.
.
.,
YjT0.
Then
W*
is
chosen
o
minimize
he
dis ance
X1−
X0WV=
(X1−
X0W)V(X1−
X0W)be ween
X1and
X0W
subjec
o
wj≥
0
and
w2+
.
.
.
+
wJ+1 =
1,
whe e
V
is
symme ic
and
posi i e
semide ini e
ma ix
chosen
in
a
way
ha
he
esul ing
syn he ic
con ol
egion
app oxima es
he
ajec o y
o
he
ou come
a iable
o
he
a ec ed
egion
in
he
p e-in e en ion
pe iods.
The
model
desc ibed
abo e
has
se e al
ad an ages
when
compa ed
o
o he
app oaches
used
in
he
li e a u e.
As
poin ed
ou
by
Billmeie
and
Nannicini
(2013),
he
model
is
anspa en ,
gi en
he
weigh s w∗
2,
.
.
.,
w∗
J+1iden i y
he
egions
ha
a e
used
o
cons uc
coun e ac uals
o
he
ea ed
egion,
and
he
model
is
lexible,
as
he
se
o
po en ial
con ol
egions
can
be
app op ia ely
es ic ed
o
make
he
compa isons
sensible.
Also,
he
model
elaxes
he
assump ion
ha
con ounding
ac o s
a e
ime
in a ian
( ixed
e ec s)
o
sha e
a
common
end
(di e ences-in-di e ences),
gi en
he
e ec
o
unobse able
con ounding
ac o s
is
allowed
o
a y
wi h
ime.
On
he
o he
hand,
his
app oach
has
he
limi a ion
ha
i
does
no
allow
one
o
assess
he
signi icance
o
he
esul s
using
s anda d
in e en ial
echniques,
gi en
he
numbe
o
un ea ed
egions
and
he
numbe
o
pe iods
conside ed
a e
small.
Abadie
e
al.
(2010)
sugges
ha
in e ence
should
be
ca ied
ou
by
implemen ing
placebo
expe imen s.
In
his
case,
in e ence
is
based
on
compa isons
be ween
he
magni ude
o
he
gaps
gene a ed
by
he
placebo
s udies
and
he
magni ude
o
he
gap
gene a ed
o
he
ea ed
s a e.
Thus,
i
he
gap
es ima ed
o
he
ea ed
s a e
is
la ge
compa ed
o
he
gap
es ima ed
o
he
placebo
expe imen s,
hen
he
analysis
would
sugges
ha
he
ea men
had
an
e ec
on
he
ou come
o
in e es
and
is
no
d i en
by
chance.
3.
Da a
We
use
coun y-le el
da a
co e ing
mos
FIFA
Wo ld
Cups
occu ing
in
he
pe iod
be ween
1978
(A gen ina)
and
2006
(Ge many).1Ou
da a
comes
om
h ee
di e en
sou ces.
The
main
a iable
o
in e es
(GDP
pe
capi a)
and
h ee
o
he
co a ia es
included
in
he
ec o
o
p e-in e en ion
cha ac e is ics
(popula ion,
in es men
(g oss
o al
in es men /GDP),
go e nmen
inal
consump ion
expendi u e
(%
o
GDP)
and
consume
spending
(%
o
GDP)),
we e
ob ained
om
he
Penn
Wo ld
Tables
7.1.
Addi ionally,
we
ob ained
da a
om
Ma shall
e
al.
(2014)
and
om
Ba o
and
Lee
(2010)
on
a
poli ics
index
and
on
seconda y
school
en ollmen ,
espec i ely,
o
use
as
addi ional
co a ia es
in
he
ec o
o
p e-in e en ion
cha ac e is ics.2We
should
emphasize
ha ,
ollowing
Abadie
e
al.
(2010),
we
augmen ed
1Selec ion
o
Wo ld
Cups
o
be
analyzed
was
based
on
da a
a ailabili y.
2We
hank
an
anonymous
e e ee
o
sugges ing
hese
addi ional
co a ia es.
336
J.H.N.
Viana
e
al.
/
EconomiA
19
(2018)
330–349
Table
2
Da a
desc ip ion
and
sou ces.
Va iable
Desc ip ion
Sou ce
RGDPL
Real
g oss
domes ic
p oduc
pe
capi a
in
PPP
2005
dolla s Penn
Wo ld
Table
7.1
( gdpl)
Pop.
G o. Popula ion
g ow h Penn
Wo ld
Table
7.1
(POP)
In ./GDP In es men
sha e
o
PPP
con e ed
GDP
pe
capi a
a
2005
cons an
p ices
Penn
Wo ld
Table
7.1
(ki)
Go ./GDP
Go e nmen
consump ion
sha e
o
PPP
con e ed
GDP
pe
capi a
a
2005
cons an
p ices
Penn
Wo ld
Table
7.1
(kg)
Con./GDP
Consump ion
sha e
o
PPP
con e ed
GDP
pe
capi a
a
2005
cons an
p ices
Penn
Wo ld
Table
7.1
(kc)
Sec.En oll
Senconda y
en ollmen
in
housands
Ba o
and
Lee
(2010)
Poli ics
Index
om
−10
(Au oc acy)
o
10
(Full
Democ acy)
Ma shall
e
al.
(2014)
Table
3
Desc ip i e
s a is ics.
G oup
o
coun ies
Va iables
Mean
S.D.
Min
Max
Median
All
coun ies RGDPC
8.45
11.01
0.16
136.31
4.03
Pop.
G o. 0.02
0.04
−0.56 3.58
0.02
In ./GDP 22.93
11.24
−11.50
93.64
21.68
Go ./GDP
11.86
8.97
0.31
67.19
8.89
Con./GDP
70.67
19.18
3.56
219.12
70.86
Sec.En oll
5.33
27.88
0.00
492.74
0.47
Poli ics
0.25
7.47
−10.00
10.00
−1.00
OECDaRGDPC
19.17
11.79
1.24
80.22
17.27
Pop.
G o.
0.01
0.10
−0.02
3.58
0.01
In ./GDP
24.25
8.12
1.75
80.39
23.10
Go ./GDP
8.07
3.71
1.66
28.40
7.55
Con./GDP
66.69
9.59
29.27
96.05
67.62
Sec.En oll
2.75
3.70
0.00
19.65
1.28
Poli ics
6.79
6.33
−10.00
10.00
10.00
La in
Ame ica RGDPC
4.97
2.53
1.17
12.53
4.57
Pop.
G o.
0.02
0.01
−0.10
0.05
0.02
In ./GDP
19.96
7.73
−11.50
52.13
19.52
Go ./GDP
9.72
6.28
1.18
49.37
8.10
Con./GDP
74.21
10.60
29.22
110.98
75.51
Sec.
En oll
1.75
4.22
0.01
44.96
0.49
Poli ics
1.64
6.69
−10.00
10.00
5.00
Sou ce:
esea ch
da a.
aI
also
includes
Taiwan
and
Singapo e,
while
excludes
Czech
Republic,
Es onia,
Iceland,
Is ael,
Slo akia,
Slo enia,
besides
he
coun ies
ha
hos ed
he
Wo ld
Cup.
ou
ec o
o
p e-in e en ion
cha ac e is ics
o
allow
o
he
inclusion
o
lagged
GPD
pe
capi a
o
imp o e
p e-
in e en ion
adjus men .
Tables
2
and
3
p o ides
a
b ie
explana ion
and
desc ip i e
s a is ics
o
all
he
a iables
used
in
ou
analysis.
As
we
b ie ly
explain
abo e,
he e
a e
wo
possible
de ini ions
o
he
ea men
assignmen
pe iod
(T0).
One
possibili y
is
o
use
he
yea
in
which
he
wo ld
cup
eally
occu ed.
In
his
case,
we
would
conside
he
yea s
p esen ed
in
column
1
o
Table
1.
The
second
possibili y
is
o
use
he
yea
in
which
FIFA
announced
he
hos ing
coun y
o
he
ollowing
e en
(p esen ed
in
column
2
o
Table
1).
Fo
his
pape ,
we
decided
o
use
in
ou
main
speci ica ion
he
yea
o
announcemen ,
because
mos
in es men s
in
in as uc u e
(new
cons uc ion
p ojec s
like
s adiums,
e c.)
happen
be o e
he
ac ual
cup
happens.
We
do,
howe e ,
conside
using
he
yea
in
which
he
Wo ld
Cup
is
ealized.
As
i
will
be
shown
in
he
nex
sec ion,
quan i a i e
esul s
a e
qui e
simila
ega dless
o
wha
de ini ion
is
used.
Ano he
impo an
poin
ega ding
he
applica ion
o
he
syn he ic
con ol
me hod
is
he
choice
o
coun ies
ha
will
be
included
as
po en ial
con ol
uni s
o
he
ea ed
coun ies.
In
ha
sense,
a
i s
limi a ion
comes
di ec ly
om
he
a ailable
da a.
Al hough
Penn
Wo ld
Tables
con ain
da a
on
188
coun ies
since
1950,
o he
da a
sou ces
ha e
una ailable
da a
o
some
coun ies
( o
example,
s a ing
a e
1950)
o
a e
incomple e,
such
as
Ba o
and
Lee’s
J.H.N.
Viana
e
al.
/
EconomiA
19
(2018)
330–349
337
(2010)
da a,
which
a e
only
a ailable
o e
i e-yea
in e als.3Also,
he
s a ing
yea
T0is
di e en
o
each
o
he
coun ies
analyzed,
he e o e,
we
mus
exclude
om
he
lis
o
po en ial
con ol
uni s
ecen
hos ing
coun ies
which
migh
s ill
be
unde
he
e ec
o
he
e en .
Ou
inal
se
o
po en ial
con ols,
he e o e,
a y
wi hin
hos ing
coun ies.
Fo
ins ance,
Ge many
2006
has
mo e
han
70
po en ial
con ols
while
A gen ina
1978
has
only
34.4
In
Table
4
we
p esen
summa y
s a is ics
o
he
9
coun ies
ha
hos ed
a
Wo ld
Cup
in
he
pe iod
analyzed.
No e
ha
o
each
coun y
we
p esen
wo
se s
o
s a is ics,
labeled
as
1
and
2.
Label
1
e e s
o
he
case
in
which
ea men
assignmen
is
based
on
he
da e
he
hos ing
coun y
was
announced,
while
label
2
e e s
o
he
case
in
which
ea men
assignmen
is
he
yea
he
e en
occu ed.
Fo
example,
A gen ina
be o e
announcemen
(A gen ina
1)
had
an
a e age
g oss
o al
in es men /GDP
o
22.31,
while
A gen ina
be o e
he
Wo ld
Cup
occu ed
(A gen ina
2)
had
an
a e age
g oss
o al
in es men /GDP
o
23.91.
4.
Resul s
We
s a
by
p esen ing
esul s
ha
conside
in
ou
dono
pool
all
coun ies
wi h
a ailable
da a
(uncons ained
dono
pool).
Then,
acco ding
o
he
usual
p ac ice
in
his
li e a u e,
we
es ic
ou
dono
pool
o
be
composed
o
coun ies
wi h
simila
cha ac e is ics
( o
ins ance,
only
OECD
coun ies
a e
conside ed
as
dono s
o
USA
and
Eu opean
coun ies).
4.1.
Uncons ained
dono
pool
Be o e
looking
a
he
es ima ed
e ec s
o
he
Wo ld
Cups,
le
us
i s
look
a
he
coun ies
ha
compose
he
syn he ic
coun y
o
each
o
he
ea ed
coun ies
and
how
hei
p e- ea men
cha ac e is ics
compa e
o
he
p e-
ea men
cha ac e is ics
o
he
eal
hos ing
coun y.
Table
5
p esen s
he
es ima ed
weigh s
o
each
coun y
in
he
se
o
po en ial
con ol
coun ies.5Syn he ic
A gen ina
and
syn he ic
F ance,
o
example,
a e
con ex
combina ions
o
many
o he
coun ies,
while
syn he ic
Ge many
is
composed
o
only
Aus ia,
Belgium,
Bulga ia
and
Swi ze land.
Hence,
as
we
highligh
abo e,
he
model
is
anspa en
as
he
weigh s
clea ly
iden i y
he
coun ies
ha
a e
used
o
cons uc
he
coun e ac uals.
In
Table
4
we
p o ide
he
nume ical
compa ison
by
explana o y
a iable
be ween
each
ea ed
coun y
and
he
cons uc ed
syn he ic
con ol.
Again,
no e
ha
we
ha e
wo
syn he ic
con ols
o
wo
di e en
coun ies
in
each
case
s udy.
Also,
he
ma ix
V
was
chosen
o
minimize
he
mean
squa ed
p edic ion
e o
p oduced
by
he
weigh s
W∗(V)
du ing
he
alida ion
pe iod
(eigh
yea s
be o e
ea men
yea ,
T0).
A
i s
poin
we
look
a
is
how
di e en
a e
coun ies
and
hei
syn he ic
con ol
cha ac e is ics
when
using
label
1
(announcemen
yea )
o
label
2
(Wo ld
Cup
yea ).
In
mos
coun ies,
he e
a e
signi ican
di e ences
be ween
he
wo.
Syn he ic
A gen ina
1
has
an
a e age
in es men /GDP
a io
o
21.11,
while
o
Syn he ic
A gen ina
2
his
numbe
equals
22.83.
A
gene al
conclusion,
howe e ,
is
ha
he
syn he ic
coun ies
seem
o
p o ide
a
be e
con ol
g oup
han
only
compa ing
he
ea ed
coun y
wi h
he
a e age
cha ac e is ics
o
all
o he
coun ies
in
he
dono
pool
o
wi h
a
single
coun y.
This
ad an age
will
become
clea e
in
he
g aphs
below.
As
s a ed
abo e,
he
con ex
se
o
weigh s
ha
composes
he
syn he ic
con ol
uni
is
chosen
by
he
minimiza ion
o
he
ec o s
V
and
W(V).
Reliable
causal
syn he ic
con ol
es ima o s
equi e
ha
he
coun e ac ual
uni
esemble
he
main
cha ac e is ics
o
he
ea ed
coun y
in
he
pe iod
be o e
he
in e en ion.
In
pa icula ,
he
choice
o
coun ies
ha
compose
he
syn he ic
uni s
highligh
an
impo an
ea u e
o
he
SCM
since
he
ea ed
and
syn he ic
uni s
a e
easonably
compa able,
by
excluding
hose
uni s
ha
do
no
p esen
simila
cha ac e is ics
in
he
p e- ea men
pe iod.
The
g aph
on
he
le -hand
side
o
Figs.
1
and
2
ep esen
he
ime
se ies
o
he
ou come
a iable,
eal
GDP
pe
capi a,
o
he
ea ed
uni
(solid
line)
and
he
syn he ic
con ol
uni
(dashed
line),
bo h
in
he
en i e
p e- ea men
pe iod
and
o
en
yea s
a e
he
pe iod
he
e en
occu ed.
The
do ed
e ical
line
ep esen
he
yea
FIFA
announced
he
hos ing
coun y.
The
compa ison
be ween
he
solid
and
dashed
line
be o e
ea men
shows
he
quali y
o
adjus men
in
he
ime
se ies
o
he
ou come
a iable
o
he
coun y
hos ing
he
Wo ld
Cup
and
he
ime
se ies
o
he
ou come
3Da a
o
in-be ween
yea s
we e
ob ained
ia
in e pola ion,
as
is
common
in
he
li e a u e.
4We
emphasize
ha
he
lis
o
po en ial
con ols
do
no
include
any
o
he
coun ies
ha
hos ed
a
Wo ld
Cup
du ing
he
sample
we
analyze.
5In
his
able
we
epo
only
coun ies
ha
ecei ed
weigh s
la ge
han
0.005.
Fo
ins ance,
he
syn he ic
con ol
o
Ge many
is
composed
o
78
coun ies,
mos
wi h
e y
small
weigh s.
Fo
he
sake
o
space
limi a ion,
we
only
epo
hose
wi h
ep esen a i e
weigh s.
344
J.H.N.
Viana
e
al.
/
EconomiA
19
(2018)
330–349
a e
no
clea
jumps
in
he
ou come
a iable
be o e
announcemen .
The e o e,
ou
esul s
appea
no
o
su e
om
p e- ea men
mac oeconomic
decisions.
4.2.
Cons ained
dono
pool
The
esul s
p esen ed
on
he
p e ious
sec ion
conside ed
all
coun ies
wi h
a ailable
da a
as
po en ial
dono s
o
each
ea ed
coun y
conside ed
in
he
analysis.
Howe e ,
Abadie
e
al.
(2010)
and
Billmeie
and
Nannicini
(2013)
d aw
a en ion
ha
his
huge
and
e y
di e se
pool
could
esul
in
o e i ing
o
he
syn he ic
con ol,
he e o e
assigning
la ge
weigh s
o
coun ies
ha
di e
subs an ially
om
he
coun y
one
is
ying
o
cons uc
he
syn he ic
con ol.
To
check
i
ou
esul s
a e
a ec ed
by
his
so
o
p oblem,
we
ollow
he
li e a u e
and
es ima e
all
he
syn he ic
con ols
using
es ic ed
pools
o
coun ies.
Speci ically,
o
USA
and
Eu opean
hos s,
we
es ic ed
he
pool
o
coun ies
o
hose
belonging
o
he
OECD.
Fo
Japan
and
Ko ea,
gi en
hey
we e
he
only
Asian
coun ies
belonging
o
he
OECD,
we
es ic ed
hei
dono
pool
o
OECD
coun ies
plus
Taiwan
and
Singapo e.
Finally,
o
he
Wo ld
Cups
hos ed
in
La in
Ame ica
(A gen ina
and
Mexico)
we
es ic ed
he
dono
pool
o
only
La in
Ame ican
coun ies.
Table
3
p esen s
he
desc ip i e
s a is ics
o
hese
subg oups.
The
esul s
o
he
es ima ions
wi h
es ic ed
pool
o
dono s
a e
shown
in
Figs.
4
and
5.
Fo
mos
coun ies,
esul s
a e
p ecisely
he
same
as
hose
ob ained
using
he
un es ic ed
dono
pool.
The
only
wo
excep ions
a e
Mexico
and
Spain.
Fo
he
Mexican
case,
he
e ec
appea s
o
be
sligh ly
posi i e
bu
p e- ea men
adjus men
was
so
poo
ha
any
conclusions
de i ed
om
his
empi ical
exe cise
a e
weak.
On
he
o he
hand,
o
Spain
he
(doub ul)
posi i e
e ec
ob ained
conside ing
he
uncons ained
case
is
now
con incingly
null,
he e o e
sus aining
ou
main
conclusion
ha
wo ld
cups
a e
no
s a is ically
associa ed
o
posi i e
economic
g ow h.
4.3.
Robus ness
checks
Al hough
o iginal
placebo
p ocedu es
like
RMSE
p o ide
use ul
in o ma ion
abou
he
likelihood
o
es ima ed
e ec s
unde
he
null
hypo hesis
o
no
e ec ,
plausible
p- alues
a ea
no
eadily
a ailable
due
o
he
limi ed
numbe
o
placebo
uni s
in
some
case
s udies
and
he
exis ence
o
uni -speci ic
ansi o y
shocks
ha
should
be
ze o
mean
bu
no
a e aged
ou
in
SCM
es ima o s.
Ando
(2015)
p o ides
wo
es
s a is ics
aimed
o
access
he
signi icance
o
he
in e en ion
impac .
We
use
such
es s
o
access
he
e ec
o
he
Wo d
Cup
on
hos
coun ies’
GDP
pe
capi a.
The
i s
es
consis s
in
compa ing
he
a e age
ea men
e ec s
sizes
ela i e
o
he
dis ibu ion
o
a e age
placebo
e ec s
o
all
placebo
uni s,
in
all
case
s udies,
whe e
he
o al
numbe
o
a e age
placebo
e ec s
a e
inc eased
by
summing
placebo
ials
in
di e en
case
s udies.
I
consis s
in
es ima ing
all
ea men
e ec s, ˆ
αg ,
and
placebo
e ec s,
ˆηgi ,
o
all
case
s udies,
wi h
g
indica ing
one
speci ic
Wo ld
Cup
edi ion,
i
ep esen ing
a
con ol
uni
in
dono
pool
and
∈{T0+1,
.
.
.,
T}.
Then,
we
calcula e
he
a e age
ea men
e ec s
o
he
ea ed
uni s, ˆ
αg,
and
o
he
placebo
uni s,
ˆηgi,
o e
ime
o
all
case
s udies
in
he
pos -in e en ion
pe iod.
We
use
he
dis ibu ion
o
ˆηgi o
signi icance
es s
on ˆ
αg,
assuming
ha
hey
ollow
common
dis ibu ion
unde
he
null
hypo hesis.
The
second
es
p oposed
by
Ando
(2015)
checks
whe he
he
o e all
a e age
ea men
e ec
is
su icien ly
la ge
in
compa ison
o
he
dis ibu ion
o
co esponding
placebo
es ima es
ha
a e
calcula ed
wi h
andomly
chosen
placebo
uni s.
The
i s
s ep
consis s
in
es ima ing
he
o e all
ea men
e ec , ˜
α
=G
g=1ˆ
αg/G,
and
he
o e all
placebo
e ec s,
˜
γ
=G
g=1ˆ
γgi/G,
by
andomly
choosing
a
con ol
uni
i
in
each
g,
whe e
G
is
he
numbe
o
Wo ld
Cup
edi ions.
Then,
we
eplica e
he
p e ious
s ep
M
imes
o
c ea e
a
dis ibu ion
o
o e all
a e age
placebo
e ec s, ˜
γm,
wi h
m
=
1,
.
.
.,
M.
Finally,
he
dis ibu ion
o ˜
γmis
used
o
signi icance
es s
on ˜
α.
The
esul s
o
bo h
es s
a e
p esen ed
in
Figs.
6
and
7,
espec i ely.
In
Fig.
6
we
obse e
ha
he
dis ibu ion
o
he
a e age
e ec
o
all
uni s
ha e
mean
a ound
ze o,
indica ing
ha
he
ea men
assignmen
has
no
sys ema ic
e ec s
on
he
con ol
uni s.
Rega ding
he
magni ude
o
he
a e age
e ec s,
all
he
Wo ld
Cup
edi ions
ail
o
ejec
he
null
hypo hesis
o
no
impac
on
GDP
pe
capi a.
Fig.
7
p esen s
he
esul
o
he
o e all
a e age
ea men
e ec
es .
I

J.H.N.
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e
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/
EconomiA
19
(2018)
330–349
345
Fig.
4.
Syn he ic
con ol
analysis
( es ic ed
pool
o
dono s)
o
he
1994–2006
FIFA’s
Wo ld
Cup.
346
J.H.N.
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e
al.
/
EconomiA
19
(2018)
330–349
Fig.
5.
Syn he ic
con ol
analysis
( es ic ed
pool
o
dono s)
o
he
1978–1990
FIFA’s
Wo ld
Cup.
J.H.N.
Viana
e
al.
/
EconomiA
19
(2018)
330–349
347
Fig.
6.
Densi y
o
a e age
placebo
e ec s.
No e:
CDF(x)
is
he
empi ical
cumula i e
dis ibu ion
unc ion
o
a e age
placebo
e ec s.
Fig.
7.
Densi y
o
o e all
placebo
e ec s.
No e:
numbe
o
Mon e
Ca lo
epe i ions
M
=
100,000.
CDF(x)
is
he
empi ical
cumula i e
dis ibu ion
unc ion
o
o e all
a e age
placebo
e ec s.
shows
ha
he
o e all
e ec
is
lowe
han
he
h eshold
line
a
CDF
=
99,5%
when
we
un
M
=
100,000
Mon e
Ca lo
simula ions.
In
his
sense,
i
is
unlike
ha
he
magni ude
o
his
o e all
e ec
is
gene a ed
by
andom
e o s.
5.
Concluding
ema ks
The
FIFA
(Fédé a ion
In e na ionale
de
Foo ball
Associa ion)
Socce
Wo ld
Cup
anks
among
he
h ee
la ges
e en s
in
he
wo ld.
I
no
only
a ec
he
in lux
o
people/ ou ism
in
he
hos
coun y,
bu
also
in ol es
publicly
inanced
capi al
imp o emen
p ojec s
ha
a e
unde aken
o
imp o e
in as uc u e,
such
as
he
cons uc ion
o
new
348
J.H.N.
Viana
e
al.
/
EconomiA
19
(2018)
330–349
s adiums
and
he
imp o emen
o
old
ones,
oad
and
ai po
cons uc ion
and
imp o emen ,
among
many
o he s.
The
isks
and
cos s
in ol ed
in
hos ing
an
e en
o
his
magni ude
a e
la ge;
howe e ,
in
all
p e ious
Wo ld
Cup
edi ions
he e
has
been
la ge
compe i ion
o
hos
he
e en .
This,
in
pa ,
is
due
o
he
common
belie
ha
hos
coun ies
will
expe ience
highe
economic
g ow h
a es,
educ ion
on
unemploymen
a es,
inc eases
in
ou is ic
ac i i ies
and
go e nmen
income,
inc ease
in
capi al
in low
and
an
imp o emen
o
he
image
o
he
coun y
wo ldwide.
Cu en
li e a u e
on
his
subjec
is
sca ce
and
inconclusi e,
specially
conside ing
he
me hods
used
so
a ,
which
migh
su e
om
se e e
iden i ica ion
p oblems.
In
his
pape
we
mo e
away
om
he
me hods
p e iously
used
o
s udy
he
subjec
and
p opose
o
use
he
syn he ic
con ol
me hod
(SCM),
a
echnique
which
gained
popula i y
ecen ly
and
is
well
sui ed
o
s udy
he
p oblem
add essed
in
his
pape .
The
main
ad an age
lies
on
he
ac
ha ,
unlike
mos
o
he
es ima o s
used
in
he
li e a u e
o
p og am
e alua ion
and
specially
in
he
li e a u e
analyzing
he
e ec s
o
wo ld
cups,
he
SCM
deals
in
some
deg ee
wi h
ime- a ying
unobse able
con ounde s.
A
second
con ibu ion
o
ou
pape
ela es
o
he
numbe
o
e en s
conside ed
in
he
analysis.
Unlike
mos
pape s
in
he
li e a u e
which
conside
only
one
wo ld
cup
in
hei
analysis,
ou
pape
expands
p e ious
esea ch
and
o e
a
se
o
empi ical
case
s udies
o
bes
analyze
he
ela ionship
be ween
he
e en s
and
he
pa e n
o
income.
We
conside
a
o al
o
8
e en s
held
in
9
coun ies,
co e ing
all
Wo ld
Cups
occu ing
in
he
pe iod
be ween
1978
(A gen ina)
and
2006
(Ge many).
Ou
empi ical
indings
show
ha
o
he
majo i y
o
he
coun ies
conside ed
in
he
analysis
(Ge many,
Japan,
Ko ea,
F ance,
Uni ed
S a es,
I aly,
Mexico
and
A gen ina),
he
Wo ld
Cup
had
a
null
o
a
nega i e
e ec
on
income
pe
capi a.
Wi h
he
excep ion
o
Spain
and
Mexico,
in
which
he
syn he ic
con ol
p esen ed
a
poo
p e- ea men
i
wi h
eal
GDP
ime
se ies,
all
o he
coun ies
p esen ed
a
qui e
good
p e- ea men
adjus men
be ween
eal
and
syn he ic
con ol
se ies.
This
is
qui e
com o ing
because
he
in e en ial
alue
o
his
expe imen
inc eases
when
he
me hod
deli e s
a
sui able
coun e ac ual
o
he
analysis.
The
gene al
conclusion
o
he
pape
poin s
in
he
di ec ion
ha
hos ing
a
Wo ld
Cup
leads
o
no
economic
bene i .
We
emphasize,
howe e ,
ha
ou
pape
looks
only
a
GDP
pe
capi a.
Hence,
any
o he
bene i s
ela ed
o
economic
well-being
o
he
popula ion,
ade
(see,
o
example,
he
wo k
o
Rose
and
Spiegel,
2011),
o
gains
ela ed
o
he
image
o
he
coun y
and
u u e
ou is ic
ac i i ies
a e
no
cap u ed
in
ou
analysis.
Howe e ,
despi e
he
po en ial
posi i e
bene i s
in
e ms
o
well
being
in
hos ing
he
Wo ld
Cup,
ou
pape
sugges s
ha
coun ies
unde
economic
u moil
migh
su e
om
hos ing
a
Wo ld
cup,
ins ead
o
boos ing
hei
economy,
as
mos
belie e.
Acknowledgemen s
We
a e
indeb ed
o
wo
anonymous
e e ees
o
hei
help ul
commen s.
Any
emaining
e o s
a e
ou
esponsibili y
only.
This
esea ch
did
no
ecei e
any
speci ic
g an
om
unding
agencies
in
he
public,
comme cial,
o
no - o -p o i
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