Olympics are rare enough that I don't know if any formal study has been done. However, similar arguments are made all the time in support of building new sport

Olympics are rare enough that I don't know if any formal study has been done. However, similar arguments are made all the time in support of building new sports stadiums. And at least in those cases, the arguments simply don't hold water: the beneficiary is the team ownership, NOT the taxpayers. See http://www.cato.org/pubs/pas/pa-339es.html http://www.cato.org/pubs/pas/pa-339es.html : The economic facts, however, do not support the position that professional sports teams should receive taxpayer subsidies. The lone beneficiaries of sports subsidies are team owners and players. ... Indeed, the results of studies on changes in the economy resulting from the presence of stadiums, arenas, and sports teams show no positive economic impact from professional sports -- or a possible negative effect.