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New Zealand rugby victory may equal economic optimism


New Zealand defeated France on Saturday October 22, 2011, to win the Rugby World Cup. It was a narrow win, by one point, but one that the nation certainly needed.

The past year has been tough for New Zealanders. On September 4, 2020, the South Island in the Canterbury Region received significant damage during an earthquake of magnitude 7.1 on the Richter Scale.

In November 2010, mine blasts in the Pike River Mine, northwest of Greymouth in the South Island, killed 29 miners and contractors. Thirty-one miners were present in the mine during the first explosion. Two men escaped, but the rest were trapped. A second explosion five days later put an end to the rescue mission. A third and fourth explosion occurred, leaving no possibility that the men were alive. It was New Zealand’s worst mining disaster since 43 men lost their lives at Ralph’s Mine in Huntly in 1914.

Three months later, in February 2011, Christchurch in the South Island was rocked by a series of earthquakes. The initial earthquake was a magnitude of 6.3 on the Richter Scale when it hit New Zealand’s second largest city, causing widespread damage and the loss of 181 lives. This was the second deadliest natural disaster recorded in New Zealand since the 1931 Hawke’s Bay earthquake. It has been estimated that the total cost of rebuilding Christchurch and the surrounding environment to be around $16million, also making it their most expensive natural disaster and the third costliest earthquake worldwide. Another large aftershock struck the same region on June 13, adding to the damage.

Therefore, the rugby World Cup win is significant, not just for the team and its supporters, but also for the country’s economy. Research from the University of Miami suggests that a significant sporting victory can also affect a country's economy, brought about by the increased optimism of its people. An increased sense of national identity and pride has been known to take precedence over regional concerns and problems. And the power of a national win during an international competition has been known to be transformative.

A Dutch academic study of “Soccernomics” in 2006 by Ruben van Leeuwen and Charles Kalshoven discovered that World Cup-winning countries have enjoyed positive economic growth thanks to a mixture of increased confidence and heightened prestige. Kalshoven has documented that psychologically euphoric moments can prompt residents and tourists to open their wallets and spend more. Improving the New Zealand’s visibility abroad can greatly contribute to short-term, and perhaps even longer-term, consumer and investor confidence.

The International Rugby Board already predicts $40million benefits to the overall economy in New Zealand. The IRB added that revenue from the commercial program at this World Cup, including broadcast, sponsorship and travel and hospitality would deliver an estimated $128 million net surplus boost to rugby worldwide. MasterCard is predicting a lot more: up to $750million in tourism and consumer spending.

With New Zealand’s past year of natural disasters, a one point victory could have more significance that it realizes.

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