James (and Peter). I don’t disagree that there is potentially some financial benefit to a region (i.e. other than the direct pychic benefits that James’ original post suggested we focus on) of events that draw in spending from outside the region, and so, in principle, we could seek to estimate those with careful analysis. But from what I have seen the choice out there is between horribly incomplete and straight out horrible estimates. The straight-out horrible produce the usual scams–multiplier effects, rosy-scenario predictions of likely numbers, etc. The horribly incomplete ones, might make believable estimates of the amount of spending drawn in from outside with no multiplier, but from what I have seen don’t attempt to estimate the spending that is diverted (e.g. people bringing forward a trip) and certainly not the opportunity cost of the resources diverted to producing goods and services sold to the visitors.
The trouble is: there is no demand for such careful studies.

You’re right, they’re not all bad; some of them are poor estimates but some are useful. However, all of them need to be understood as only one part of a complete assessment. Interpreting them as the only relevant information in a CBA is a huge mistake. As you say, decision makers need to be fully informed to make good decisions and these estimates are one, small part of the package of information they need.

Can’t disagree with that but I would like it to be placed in context.

I don’t think the general case relies on the Winners Curse, although that will make things worse for events that are competed for. Rather it is problems with political economy. The decision to have an event is made for non-financial reasons (e.g. for some people who want the event, it is a decisive issue for determining their vote, for those opposed it is non-decisive) and then exagerated numbers are produced to give an ex post rationalisation.

That’s an interesting idea and I totally agree that we need to be very clear about the alternatives for hosting. A public choice has to be an informed one, after all.