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Using REIT Data to Assess the Economic Worth of Mega-Events: The Case of the 2020 Tokyo Olympics

Ryoh Ogawa

MPRA Paper from University Library of Munich, Germany

Abstract: This paper proposes an alternative approach to evaluate the effects of hosting mega-events, such as the Olympics, Football World Cup, and World Expo. Based on capitalization hypothesis, previous literature studies examined whether the announcement of mega-events affects prices of firms’ stock or real estate property. In contrast, I utilize data on Real Estate Investment Trust (REIT), whose price is a hybrid of stock and property. The standard event study methodology with high-frequent data allows the estimation of abnormal returns due to the mega-event of interest, and clarifies the relationship between level of returns and characteristics of REIT’s property. I present an empirical example—the 2020 Tokyo Olympics—and the results are as follows: 1) investors judged that the comprehensive effects would be positive; 2) the effect becomes smaller as the distance from Host City (Tokyo-to) increases; 3) even in areas far from Tokyo-to, real estate used for hotels and commercial facilities are relatively susceptible to the Olympics.

Keywords: mega-events; Olympic Games; Real Estate Investment Trust; event study (search for similar items in EconPapers)
JEL-codes: G14 L83 R30 R53 (search for similar items in EconPapers)
Date: 2017-05-01
New Economics Papers: this item is included in nep-spo and nep-ure
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