Economic Countdown To The Olympics 2: Predicting Olympic Medals

Tyler Durden's picture

In the second part of our five-part series on The Olympics (Part 1 here) we ponder the impossible to predict - the medal count. As Goldman notes: Economists like to think that the toolkit of their profession helps them explain many things or, as some would claim, everything that is interesting about human behavior. In the context of the forthcoming Olympic Games in London, therefore, the key question is whether economic variables can help explain and predict success at the Olympics itself. At one level, this seems like a daft question even to consider. It is hard to imagine that economic variables could even begin to capture the kind of individual skill, mental determination and hunger that drive athletes to perform feats of unimaginable virtuosity that is the stuff of Olympic legends. But at the level of a country, it may be possible to identify the ingredients that unlock success at the Games. As British Paralympian Tim Hollingsworth explains: "...when you create a world class environment you are far more likely to create world class athletes." What is a 'world class environment' and how do we measure it across countries? Luckily, we have an answer in the GS Growth Environment Scores (GES), a broad measure of growth conditions across countries - and, indeed, this is what we find: gold does go where the growth environment is superior. The forecast leaves USA, China, and Great Britain battling it out for 'Most Golds' and USA leading China overall - but remember "the most important thing in the Olympic Games is not winning but taking part."

Jose Ursua and Kamakshya Trivedi, Goldman Sachs:

Gold Goes Where Growth Environment Is Best—Using Our GES to Predict Olympic Medals

Let’s Predict Olympic Success in London 2012

One of the ‘fun’ parts of building econometric models is that if they are reasonably good at explaining the past, they can then be used to forecast the future. In this case, we want to predict the eventual country medals tallies at London 2012.

Not all sports are created equal, and the relationship between Olympic success and the economic variables we have discussed may differ across sports for a number of reasons. It is more expensive to participate in some sports, such as Sailing or Equestrianism, and this may limit participation from low-income countries, but success may also vary on account of different traditions, culture and the demographic characteristics of the population or the geographic features of each country.

The baseline model that we use to do this is a panel regression featuring as explanatory variables our headline GES, a host dummy, population and lagged medal attainment. As a starting point, note that the model does fairly well at explaining medal outcomes from previous Olympics, or that it works well in what economists call ‘in sample’.


Chart 2 above shows the ‘in sample’ results, where we compare what the model would have predicted in the past four Olympic Games (which is as far back as our GES extend) versus what actually happened in terms of medal attainment. The 45° degree line represents a perfect forecast, and the fact that our scatter shows a high concentration of points around that line makes us quite confident that our model can satisfactorily predict Olympic success.

We are now finally ready to unveil our predictions for London 2012. Table 3 (below) shows our forecasts for medals in London 2012—gold on the left-hand side, and total number of medals on the right-hand side. In each case, we also show each country’s medal attainment in Beijing 2008, and the difference between the 2012 forecasts and the latter (a positive number means we expect the country to win more medals in 2012 than were attained in 2008).

Our forecasts reflect two very clear patterns revealed in our analysis. First, countries with superior growth environments and higher incomes are expected to win more medals, and, second, there is also a marked host effect that will likely bump up the number of medals attained by Great Britain (11 more gold medals, and 18 more overall). The US is expected to lead the group, with something close to 36 gold medals and 110 overall. Our estimates also predict that the top 10 ranks will include five G7 countries (the US, Great Britain, France, Germany and Italy), two BRICs (China and Russia), one N11 country (South Korea), and one additional developed and emerging market (Australia and Ukraine, respectively). Based on our analysis, these 10 countries will likely capture more than half of all medals attained during the Games. The rest of the countries in the list are a diverse mix from various parts of the world, broadly led by Europeans and including Asian, Latin American and African nations.

So, ultimately, it appears that gold does go where growth and the overall growth environment are best. For the next few weeks, our forecasts will be competing against other predictions for validation in the real world. Like many people around the world—economists and noneconomists alike—we will be eagerly following the medal outcomes of the long-awaited London 2012 Olympics. As Coubertin himself said, “the most important thing in the Olympic Games is not winning but taking part.” We believe the same applies to our forecasts, and although we would be delighted to see them hit their targets perfectly, we will have succeeded as long as they have provided some food for thought. The die is cast—enjoy the Games!

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Clueless Economist's picture

Basketball Prediction:

GOLD --- Lithuania


BRONZE --- Spain

4TH PLACE --- Brazil

Clueless Economist's picture

Analysis: Since 1992, Lithuania has gone Bronze, Bronze, Bronze, Bronze, 4th Place, while the 2012 team does not have the Sabonis/Marchialonis types they are deep and strong.

They will beat the NBA stars with teamwork as they did in 2004.

AssFire's picture

I had to junk you because you actually give a shit about the games and especially the NBA.

The bribery in selecting host country, the "judged sports", the hours spent spotlighting someone who competes 60 seconds in an event, and the idiotic nationalism (that does not really exist if you are over 30).

Nope, fuck that shit. I haven't watched Olympic crap since the days of the wide world of sports.  I always loved it when that dude wiped out on the ski jump epitomizing the agony of defeat.

Yen Cross's picture

 I had to give you a " Plus One" Ass Fire!    I won't even waste my time!


    I love CRF450's and Surfing, you just " EPITOMIZED"  it all.   Although  the  KTM is finallly on pipe!

I think I need to buy a gun's picture

as we all know the olympic venues in greece and china are being used for productive means,,,,,

Oh regional Indian's picture

Killuminati Bread And Circuses disguised as a peace, harmony and excellence event.

Nothing typifies this social programming lie more than all the doped "stars" and the entry of professionals.... it was supposed to be exclusively amateur. And then of course the sheer waste.

All so the symbolists can brand a huge, gullible, global population, instantaneously.

This one is going to be one for the history books, for sure. Let us see for what reasons.



Maghreb's picture

As long as the army aren't setting up shop on the Thames permanent like its no different from the usuall crap.....

BKbroiler's picture

yeah totally, if it's not american sports, who cares?

/sarc off

knukles's picture

Well I'm Kenyan and I don't care about American sports.  Hey, let's go golfing....

Overfed's picture

Spectator sports in general and non-American spectator sports in particular are a waste of time.

i-dog's picture

Another +1 from me.

Why is TD allowing the posting of all this fatuous crap this week!?!

"we will be eagerly following the medal outcomes of the long-awaited London 2012 Olympics"

Curious minds want to know....

Yen Cross's picture

 I sort of like this "Friday Night"  pop off top.   i-doremarksg   i enjoy your  remarks.

Global Hunter's picture

the thrill of victory and the agony of defeat...ABC's Wide World of Sports aired when I was a boy, even sports were honourable least I like to think they were...


GMadScientist's picture

Hmmm...Pete Rose? John McEnroe? Fred Biletnikoff's stickum?


GMadScientist's picture

"I always loved it when that dude wiped out on the ski jump epitomizing the agony of defeat."

I guess everyone needs a role model.

DoChenRollingBearing's picture

+ 1,  LOL...


Updating my blog piece to include Zombie Cannibals as part of the fun facts about my new home town...

We're Number One!


AssFire's picture

All I know is all that time in Peru should provide a smooth transition to a 3rd world hell hole like Miami.

I now advise you to purchase a handgun: A 45 cal. or 9 mm should do well against those flesh eating zombies.

Also, when you go to fire- always use the triple blast; even if you don't hit them every time it sends the message to others that you intend to kill.

Global Hunter's picture

creating your own martial art doesn't hurt either, training the mind and body for combat...fighting is hard work.

GMadScientist's picture

Mostly the mind, but you can see how that's going for him.

GMadScientist's picture

Had a nice vision of you being lunch for zombies after pissing away all your ammo.


FanCap's picture

Completely disagree. THey have neither the size nor the athleticism to beat the NBA All Sta-I mean US team.. 

That 04 USA roster is laughable compared to the current version. Stephon Marbury was on it. That's all that needs to be said, really.

spanish inquisition's picture

Brilliant! You took a series of BB performances, bundled them together and are selling us a AAA rated team.

EverythingEviL's picture

You should just shorten your name to "Clueless"


Gringo Viejo's picture

Blythe Masters, Gold Medal, Hop, Skip & Hump.

Monedas's picture

Are we talking about the cheap ass Socialist gold plated medals   ....   gold is good enough for Lenin's public urinals  ....  but they can't spare a few ounces for some decent fucking medals !   Socialists are cheap, cheap and more cheap .... and don't ever forget it !

MillionDollarBoner_'s picture

Basketcase Prediction:

GOLD --- Greece

SILVER --- Spain

BRONZE --- Italy

4TH PLACE --- France

Youri Carma's picture

Prophecies of Benjamin Solari Parravicini on 2012 London Olympics (ENG VERSION + BONUS)


Benjamin Solari Parravicini : ¿Profecia de los juegos olimpicos de Londres 2012?

London Calling Lyrics

Global Hunter's picture

he was keyed in to something.

knukles's picture

Most Definitely

Yuck, yuck, yuck, yuck.
Woo, woo, woo, woo, woo.

Aziz's picture

I'm gonna try and explain the Olympics in one graph:

Here's the total cost.

This is the amount of money taken out of the private sector by the government to waste on bread, circuses and corporate handouts. No Keynesian multiplier is enough to compensate the time, money and energy wasted on this embarrassment.

BKbroiler's picture

you can't put a price tag on everything man, chill.  The olympics are the sunday church attire of the global players.

falak pema's picture

the price per gold medal has certainly gone up; for Britain especially, hosting this 9.3 billion £ show.

I think this is the sort of gold price evolution the gold bugs of ZH drool about in their most intense wet dreams.

Dream on, gold bugs; like Count Boris of London. 

MsCreant's picture

The countries that cheat the most and lie the most on their stats will yield the greatest number of champions!

Clueless Economist's picture

hmm. I agree Ghana, Democratic Republic of Congo and Swaziland?

Pancho Villa's picture

Hasn't the Olympic Committee heard? Gold is a "barbaric relic" of no real value. This is the 21st century and it is high time that they replaced gold medals with paper ones. Winners should get "papers" with three zeros, runners up get "papers" with two zeros, third placers get "papers" with one zero, and 4th place get "papers" with no zeros.

HoofHearted's picture

Oh, but it is tradition...just ask the Bernank.

Dasa Slooofoot's picture

<---------------- 0 terrorist attacks/false flags

<---------------- 1 or more terrorist attack(s)/false flags



Haole's picture

Too much predictive programming and too many various indicators to rule this out at all.

knukles's picture

Nobody ever predicted that the French would bathe, either.
So there....

palmereldritch's picture

Yeah...but you never predicted the medal order for FF.

i-dog's picture

There is certainly something fishy with the symbology surrounding these Olympics!

First, check out the logo:

Then, see what it clearly spells out:

Then, note that the opening ceremony is on the eve of the Zionists' "Tisha B'Av" (9th day of the month of Av: the alleged day in the Kabbalist Khazarian Kalendar of such events in history as the destruction of Solomon's Temples -- both of them -- as well as some other significant events in history affecting the Jooz). The summer Olympics are starting a few weeks earlier than usual this time around.

I'm not in the least bit superstitious or religious. Unlike ORI, I don't hold much store in coincidental symbology ... but I do take notice of carefully chosen symbols that are in no way simply a coincidence.

Methinks something wicked this way cometh....

my puppy for prez's picture

I think it no coincidence that almost every "terrorist attack" in recent years (think 9/11 and 7/7) had an Israeli security firm involved.  G4S has deep Israeli-Mossad ties.

And now the British military has been asked to provide more security personnel due to the failings of G4S to get enough security guards hired and trained.  This development occured curiously after a journalist went undercover and got hired and trained for security, and revealed all sorts of shocking info regarding the "security".

Something is definitely very wrong with this picture.  We will see.....

Bicycle Repairman's picture

I'm not watching the olympics.  Tired of the political BS. 

White.Star.Line's picture

I am going to watch but know better...

Used to run track in Oregon during the 70s - Prefontaine days....

Have to be nostalgic and ignore the corporate-media-whoring-athletics aspect of the games.

Global Hunter's picture

Steve Prefonataine ran cause he loved it...yep.  Olympics are still a bunch of shite, he was a rock star though like I was today at the basketball court

francis_sawyer's picture

messed around & got a triple double...