The 2016 Olympics in Rio might be different.
At the 1996 Atlanta Olympics, Great Britain fared poorly. They took home only one gold and ranked #36 among medal winners. At Beijing in 2008, their medal count was 47 and they ranked #4. And now in London, 2012, they are faring even better. What happened?
After Atlanta, the UK decided to elevate their Olympic performance. With money from the national lottery, they funded athletes’ living expenses, training, nutrition, physiotherapy. Combining world class coaches, talented athletes, consistent funding and wise leadership, they got Olympic gold.
Or, we could say that…
TALENT times MONEY equals MEDALS.
And that takes us to Rio De Janeiro, Brazil and August 5, 2016. Western Europe and the US have been top Olympic medals winners. However, emerging economies are becoming more affluent and allocating more resources to women. Argentina is using a levy on mobile fund subscriptions to fund elite sports. Former communist nations continue to focus on athletic performance. Meanwhile though, most euro zone nations have less money to spend.
Does a shift in worldwide affluence portend a new Olympic order?
To see the current Olympic ranking, this Huffington Post interactive is superb. It not only presents bubbles to show medal winners but then weights them according to GDP and population. Based on her GDP, for example, teeny Grenada is actually faring quite well. The Guardian was my source for information on the UK Olympic turnaround and I found the Olympic “success” formula in an insightful FT article. This Globe and Mail article is also excellent.
Posted by: adminEcon
Tags: 2016 Rio Olympics, Argentina, Atlanta Olympics, Beijing Olympics, Brazil, BRICs, emerging economies, Olympics, Olympics gold medals, training athletes, UK
How to predict Olympic medal winners?
It takes money to train a world class athlete. The most economically fit countries can afford to train their athletes. Also, the “host bounce” helps. In the past, host countries have enjoyed a 3 medal boost for the Winter Games and 25 medals for the Summer Games.
Predicting the big medal winners at the 2012 Olympics, a Colorado College economist focuses on per capita income, population, the “home court” advantage and any “nation specific” effects. For London 2012, he says the U.S. will win 34 gold medals, China will leave with 33, and Russia, 25. Dr. Johnson has averaged 93% accuracy.
Here, econlife looks at the GDP/Olympic connection to Greece’s economic woes.
The Economic Lesson
Called anthropometric history, the history of human height has become an economic field of study. Economists use height data to form hypotheses about GDP, national affluence, food consumption, real family income, wages and prices.
Making Olympic predictions, economists are flipping the approach. Instead of using height data to predict GDP, GDP data is used to make predictions about the capability of human capital. For example, might growth in U.S. GDP between 1939 and 1999 relate to the 7 inch increase, from 6’1″ to 6’8″, for an average forward on the University of Wisconsin’s basketball team?
An Economic Question: Knowing that certain Communist countries have targeted resources toward supporting Olympic athletes, what GDP connection might you hypothesize?
With a March 20 deadline approaching, new European bailout negotiations continue to emphasize austerity. Curious about what austerity specifically meant, I looked at a Greek newspaper.
In the sports section, they discussed the plight of Greece and the Olympics. Athens Olympic Park, home of the 2004 games, is in a state of decay. Greek gymnasts, weightlifters and the water polo and sailing teams have not been able to afford the trip to qualifying competitions. Half the size of its 2008 Beijing counterpart, the Greek Olympic team is coping with funding that has diminished “to a trickle.”
Articles focusing on labor describe a 20% unemployment rate that is close to 50% for people under 25. Mandating a 22% decline in the minimum wage, a new bailout package would initiate a ripple of wage decreases. Social security contributions would be less and unemployment benefits would have to sink below the new minimum wage to preserve the incentive to work. At state-owned firms, long-term employment would no longer be guaranteed.
Meanwhile, consumers, businesses and banks have been affected by the effort to increase tax revenue and diminish tax evasion. Yes, property tax revenue did triple when the obligation was included on electricity bills. However, the attempt to collect unpaid taxes has had a 1% success rate. To generate more revenue, other bailout proposals suggest eliminating the special tax status of people living in the eastern Aegean Islands and those who live on islands with fewer than 3100 residents. Also, a single value added tax (VAT) rate of approximately 20% might be imposed that would result in higher prices for such items as food, drugs, electricity and taxi rides. As for the impact on the banking system, more taxes have meant lower bank deposits as the money travels to state coffers.
I did discover that the Greek government is actually expanding hiring in one area by doubling the number of tax auditors to a total of 2,000.
The Economic Lesson
Governments borrow money by selling bonds. Called sovereign debt, government bonds can be purchased by national and local governments, by businesses (including banks) and by individuals.
An Economic Question: If Greece cannot repay its bonds (loans) that are due on March 20, how might banks be affected?