Predicting the Winter Olympics with Economics

(Photo: Artis Rams)

(Photo: Artis Rams)

How many medals will U.S. athletes win at the Sochi Winter Olympics?

To answer this question, one might want to think about the abilities of the athletes involved in each competition.  And then use that information to forecast who is going to win each event.

Of course, that approach requires knowledge of the athletes involved in a wide variety of sports.  Furthermore, even if you knew how to measure ability, you would also have to figure out some way to forecast each athletes’ performance.

In a recent paper by Madeleine Andreff and Wladimir Andreff — “Economic Prediction of Medal Wins at the 2014 Winter Olympics” (PDF) – an approach advocated by a number of sports economists is employed. 

Here is how the Andreff’s begin their paper:

“A widespread assumption across sports economists is that a nation’s Olympic performance must be determined by its endowment in economic and human resources and the development of these resources. Thus, the starting point of most studies about economic determinants of Olympic medals consists in regressing a nation’s medal wins on its level of GDP per capita and population.”

As the authors noted, there have been about thirty studies looking at the summer games. But the Andreffs note that their economic model for the winter games is a first.

The elements of this model are as follows: To explain how many medals a nation will win at the Winter Olympics, the authors considered a nation’s population and per-capita income.  In addition, they authors included four dummy variables that incorporated the impact of hosting the games, the political regimes of each nation, the amount of snow each nation gets, and the number of ski resorts and winter sports facilities in each country.

Again, one should note that this study does not consider the abilities – or even the identities – of the athletes involved in these games. 

You can read the study to see all the details of the model.  For those who just want the punchline, here is the forecast for the top 15 nations:

Countries

Medals won

in 2010

Medal wins

predicted in 2014

Lower

bound

Upper

bound

USA

37

36

33

38

Germany

30

28

26

30

Canada

26

27

25

28

Russia

15

24

21

27

Norway

23

24

22

25

Austria

16

15

14

16

Sweden

11

13

12

14

France

11

12

11

13

South Korea

14

11

10

13

China

11

11

9

13

Switzerland

9

9

8

10

Japan

5

7

6

9

Italy

5

7

6

8

Netherlands

8

6

5

7

As you can see, the Andreffs expect the United States to be pretty happy when these games are over.  And Russia – the host nation – may not be as happy. 

Of course, since this model argues that per-capita income is a big reason nation’s succeed in the Olympics, and other studies (from Betsey Stevenson and Justin Wolfers) indicate that more income makes you happier; then maybe the people in the nations expected to do well in these games are already fairly happy.  If that is the case, well… these people may be even happier (if that is possible).

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  1. Jack says:

    I’m surprised how little variance there is between the upper and lower bounds. For example, the Netherlands already has 8 medals, exceeding the upper bounds of the model, and there are 12 more days of the Olympics left.

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  2. Alex says:

    The per capita budget per olympic sport could make a difference

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  3. Sen says:

    What is “economic” about the study? Anyone who has learned some statistics can do regressions, right?

    Thumb up 0 Thumb down 3
  4. corey says:

    this article made me laugh pretty hard guys thanks lmao what a complete joke

    Thumb up 3 Thumb down 1
  5. Carl says:

    Nonsense. And rich european nations who don’t have any interest in winter events? What of them?

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  6. daniel says:

    this model do not take in account a factor of culture. based on this model Singapore should as soon as possible start sending athletes to Winter Olympics to collect medals.

    culture is very important for the outcome. no one will seriously compete with Netherlands over ice scatting. Finland and Poland is crazy about ski jumping. cross country skiing is the domain of Scandinavia with exception of female athletes were Poland once again developed craziness some years ago. craziness is independent of GDP.

    I would not use this model for any form of betting.

    I bet in total 100$ on several “crazy” cases. so far I am 154$ in plus. so to me the craziness model looks to be quiet profitable…

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  7. Morgan J. Lee says:

    As a South Korean, Korea will never achieve to get 11 medals because wee got only 2 now. considering our mood, we will get 5-6 medals at our best. it’s not within upper and lower bound at all. but, it’s so interesting. thanks

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  8. Malcolm says:

    Soooo… any one else a tad confused as to how there was an overall increase in medals? I mean, the GDP in a country can increase without any effect on another country so does a new medal just magically appear? Or is it doing comparative analysis between countries GDP’s, at which point the term GDP comes into question. GDP, gross domestic product, is simply money trading hands, a divorce increases a nations GDP because of lawyers fees, so how could a GDP, which doesn’t even accurately measure a nations economic success, measure medals in the Olympics?

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