Illuminating the World Cup effect: Night lights evidence from South Africa

Gregor Pfeifer, Fabian Wahl and Martyna Marczak

Journal of Regional Science, 2018, vol. 58, issue 5, 887-920

Abstract: This paper evaluates the economic impact of the $14 billion preparatory infrastructure investments for the 2010 FIFA World Cup in South Africa. We use satellite data on night light luminosity at municipality and electoral district level as a proxy for economic activity, applying synthetic control methods for estimation. For the average World Cup municipality, we find significantly positive, short‐run effects before the tournament, corresponding to a reduction of unemployment by 1.3 percentage points. At the electoral district level, we reveal distinct effect heterogeneity, where especially investments in transport infrastructure are shown to have long‐lasting, positive effects, particularly in rural areas.

Date: 2018
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