Almost fifteen years after the Berlin Wall was razed, many former Soviet bloc countries continue to win significantly more medals at the Olympic Games than would be predicted by the size of their economies, according to a new study by economists at PricewaterhouseCoopers. It shows that this trend will continue to hold true during this summer’s Olympic games.

The study also reveals that host nations tend, on average, to boost their share of the total medals awarded by nearly two percentage points relative to what might be expected based on the size of their economies, which may be good news for Greece at the Athens Olympics. “This new study is an updated version of the one published in 2000 that analyzed how medal performance at the Sydney Olympics was related to economic and political factors,” said John Hawksworth, UK Head of Macro-economics at PricewaterhouseCoopers. “We have extended the research to include data on medal performance from the four Olympics since 1988 to produce some benchmarks against which performance at the Athens Olympics can be judged.”

The following factors were found to be statistically significant in explaining the number of medals won by each country at previous Olympic Games since 1988:

• Population;

-Average income levels (measured by GDP per capita at PPP exchange rates);

-Whether the country was previously part of the former Soviet bloc (including Cuba in this case);

• Whether the country is the host nation; and

-Medal shares in the previous Olympic Games.

The benchmark shows model estimates of the top 30 medal winners at the Athens Olympics in comparison with actual performance in Sydney 2000. These results are not necessarily the best predictions of performance in Athens, but they do represent one possible benchmark against which actual performance can be judged. The US, Russia, China and Germany are expected to continue to lead the medal table in Athens, although the model suggests that they will do well to match their performance at the Sydney Olympics.

For Greece as host nation, the medal outlook according to the model is much brighter than in Sydney, while Australia is expected to rank lower on the medal table somewhat without its home country advantage. For other countries, the model estimates tend to be more similar to performance at Sydney, but may prove useful as a standard against which to calibrate how well a country really does at the Athens Olympics in the light of its size, income levels, political history and past performance.

<B>Individual effort counts too </B>

Overall, the PricewaterhouseCoopers model is able to explain nearly 90% of the variation in medal shares across countries in recent Olympic Games, although this still leaves some room for other factors, such as outstanding individual athletic performances, to play a part as well.

“Obviously there is a lot more to Olympic performance than economics and politics, but our analysis is really intended to examine the Games from a unique perspective. It is interesting how far you can explain past medal performance with this kind of model,” said Hawksworth. “As you would expect, larger and wealthier countries do better, but the effects do not seem to be fully proportional: relative to their size, many smaller countries do very well. We also continue to find many former Soviet bloc countries pulling above their economic weight, reflecting the fact that strong sporting traditions have generally survived the change in political regime in these countries.”

The study found, as might be expected, that the number of Olympic medals won is directly proportionate to population and/or income level increases, but such increases are less than proportionate to the size and wealth of the country. The analysis suggests GDP matters most in predicting Olympic performance, rather than how this is broken down between population size and average income levels.

The research also revealed that whether a country was formerly a member of the Soviet bloc was highly significant, due no doubt to the high political importance given to athletics in many of these countries. Evidence from the Sydney Olympics suggests that these effects were still significant around a decade after the dissolution of the Soviet bloc, although they might be expected to decay gradually over time in the future. The analysis also suggests, however, that it is worth distinguishing between the group of ex-Soviet countries, where a particularly high priority was given to sport (e.g. Russia, Ukraine, Poland, Bulgaria, Romania and Cuba) and other ex-Soviet or planned economies where this was less of a priority.

Additionally, it was determined that the ‘home country’ effect is significant. On average, the medal share of the host nation has been approximately two percentage points higher than would otherwise have been expected. In the case of Sydney, Australia showed an even larger medal gain, although it will be a challenge for Greece to match this given its smaller population.

Finally, the study found that the explanatory power of the model was increased significantly by including medal shares at the previous Games, which can be interpreted as reflecting the fact that sources of comparative advantage in sport tend to persist over time.