Olympic Gold Medals: Its All About The Economics

The Games are over. Beijing and the rest of China now faces the inevitable post-party hangover.

It was certainly quite a show both on and off the track. China got its craved for position atop the gold medals table, but the U.S. won the most medals overall, so both countries can claim to be No. 1 as they return to their more usual bilateral fare — trade, product safety, yuan revaluation, market access, human rights, &c.

Yet for all Project 119 on the one side, and Michael Phelps and the Redeem Team on the other, medal counts all come down to economics: “Statistical modeling shows that population size and income per head provide an almost faultless method for identifying medal totals”, writes U.K. academic Stefan Szymanski in “The Market for Olympic Gold Medals” (free abstract here). U.S. academics Gary Becker and Richard Posner summarize the arguments in “Determinants of the Olympic Success of Different Countries“. There is a good summary of the literature on the subject at Economic Logic. And an ingenious way of looking at the same factors through the opposite end of the telescope at YouCalc’s Real Olympic Medal Count.

So it makes sense that China’s increasing medal tally over the past four Olympics follows its growing wealth, while the U.S. is in relative decline. Its 11% share of all medals is its smallest going all the way back to 1952 when it won 17% of the medals.

Szymanski tells Forbes that he expects China’s medal total will drop at the next Olympics, because that it what always happens to host nations the Olympics after. Greece’s 26 medals in Athens as followed by just 4 in Beijing. He also makes an interesting point about how globalization is spreading not just wealth but also Olympic medals. A record 81 different countries won medals in Beijing. As Mihir Bose at the BBC notes, three won medals for the first time in Beijing, and three more won their first individual medals.

Even if you pretend you can keep the politics out of the Games, you can’t keep the economics away.

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Filed under Beijing Olympics, China-U.S.

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