Abstract

Many econometric analyses have attempted to model medal winnings as dependent on per capita GDP and population size. This approach ignores the size and composition of the team of athletes, especially the role of female participation and the role of sports culture, and also provides an inadequate explanation of the variability between the outcomes of countries with similar features. This paper proposes a model that offers two substantive advancements, both of which shed light on previously hidden aspects of Olympic success. First, we propose a selection model that treats the process of fielding any winner and the subsequent level of total winnings as two separate, but related, processes. Second, our model takes a more structural angle, in that we view GDP and population size as inputs into the “production” of athletes. After that production process, those athletes then compete to win medals. We use country-level panel data for the seven Summer Olympiads from 1988 to 2012. The size and composition of the country’s Olympic team are shown to be highly significant factors, as is also the past performance, which generates a persistence effect.

Highlights

  • This paper contributes to the literature on Olympic success by proposing an econometric specification that accommodates several previously-neglected features of data on medal winnings

  • We argue that the data generating process of medal winnings more closely resembles a selection model, which is an extension of a standard two-part model, which is, in turn, an extension of the Tobit setup

  • We proceed to discuss the level of Olympic success, conditional on having won any medal

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Summary

Introduction

This paper contributes to the literature on Olympic success by proposing an econometric specification that accommodates several previously-neglected features of data on medal winnings. Our structural approach, in which PCGDP and population size produce athletes who proceed to compete for medals, provides a more economic interpretation of medals winnings Such an interpretation does not surface in more prediction-motivated reduced form models. Another branch of literature employs methods more commonly used to study firm efficiency, including data envelope analysis [9,10] and stochastic frontier analysis [11] All of these cited studies point to considerable variation in country-level performance, which implies the presence of unobserved country-specific traits, such as sports culture, elite sports institutes, sports management, and sports medicine in generating success [12,13,14,15,16]. The panel is unbalanced, albeit not strongly so, with almost 70 percent of countries present in all seven competitions, and almost 93 percent present in at least five Olympiads

Distribution of Medal Winnings
Female Participation
Other Variables
Selection Model
Structural Treatment of Athletic Participation
Explanatory Variables and Estimation
Results
Selection
Why the Model May Provide an Inadequate Fit for Small Countries
Outcome
Why the Structural Assumptions May Fail for Large Countries
Fitted Medal Winnings
Conclusions
Full Text
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