Olympic Predictions

Executive Summary

Who Wins the Olympic Games

By

Andrew B. Bernard
Tuck School of Business, Dartmouth College

Meghan R. Busse
Yale School of Management

August 28, 2000

Every four years it begins anew, the hand-wringing and finger-pointing over a poor showing at the Olympics. The only real uncertainty is which countries will feel the sharpest disappointment over their poor performances. After the Barcelona Olympics, headlines rated the U.S. performance as mixed in spite of the 108 medals won. In 1996, after the Atlanta Games, headlines in London trumpeted that United Kingdom should be ashamed of its Olympic performance while in Mexico, Japan, Singapore, Colombia and Egypt, medal totals below expectations led to national self-examinations.

Which country will do better at the Olympics: one with a small population but a high per capita income or one with a large population but with low per capita income? In an innovative new paper, researchers at Dartmouth and Yale argue that they will win about the same number of medals. Professors Andrew Bernard of the Tuck School of Business at Dartmouth and Meghan Busse of the Yale School of Management show that national Olympic medal totals are highly correlated with total gross domestic product and that population and per capita income contribute equally.

Countries such as the US and Germany win large numbers of medals because they have both large populations and high per capita GDP. China wins more medals than France because its huge population more than compensates for its low income. Brazil and Spain win almost the same number of medals because of the large population of Brazil (more than four times greater) and the higher per capita income of Spain (more than three times greater).

Professors Bernard and Busse find that the dominance of the largest and wealthiest countries has eroded over time. This trend has led to a greater number of countries winning medals and lower medal shares for countries such as the U.S. and Russia. The researchers predict a second straight decline in total medals for the U.S. in the 2000 Games.

 

Medals won in Atlanta

Predicted Medals in Sydney

U.S.

101

97

Germany

65

63

Russia

63

59

China

50

49

Australia

41

52

The researchers also identify countries that underperform and overachieve given their populations and incomes. Japan's Olympic medal performance has lagged far behind what would be expected given its resources. In order not to underperform in Sydney, Japan will have to increase its medal total from 1996 by more than one third. Professors Bernard and Busse argue that the United Kingdom was correct to think that it under-performed in 1996. They find that the United Kingdom will have to increase its medal winnings by 20-33% from 1996 in order to keep up with expectations. On the other hand, Australia and Italy were overachievers in 1996, each winning 15 medals more than would have been predicted from their incomes and populations.

Professors Bernard and Busse find evidence that hosting the Olympics boosts the medal total for the host country. The Olympic home turf advantage may add as many as 13 additional medals to the Australian total this year.

Professors Bernard and Busse find evidence for what many have long suspected, that Eastern Bloc countries were able to successfully increase their medal totals by directing resources to their national Olympic efforts. At its peak, this effect enabled the Eastern Bloc countries to win an extra 25 percent of the total medals. Since the dissolution of the Soviet Union and democratization of Eastern Europe, the medal bonus for these countries has largely disappeared.

Andrew B. Bernard
Andrew B. Bernard is an Associate Professor of Business Administration at the Amos Tuck School of Business at Dartmouth College. His regular research and teaching interests focus on the effects of international trade and investment on the performance of firms and countries.

Meghan R. Busse
Meghan R. Busse is an Assistant Professor of Economics at the Yale School of Management where she teaches microeconomics and competitive strategy. Her research focuses on pricing, market structure, and the strategic interactions among firms.

© Copyright 2000 by Andrew B. Bernard and Meghan R. Busse