Jun 18, 2010

A 10% World Cup trade effect?

The other day I blogged about how South African wine sales were booming worldwide, thanks to a certain World Cup effect, similar to Rose's Olympic effect. As Rose 34% effect cannot be taken too seriously, mostly due to outdated econometric methods, I played a bit with the data to check for myself.

I compared export growth in a World Cup year between the host and the failed bidders and found that it is 10% higher for hosts on average, conditional on export growth in the 2 years before the Cup, and this is significant at the 5% level.

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