The Market for Olympic Gold Medals

Stefan Szymanski

Published: December 2000

From a national perspective the Sydney Olympics were almost completely predictable. Statistical modelling shows that population size and income per head provide an almost faultless method for identifying medal totals. However, it is probably the discrepancies that are most interesting– why do some countries outperform and others underperform? Cheating, through drug abuse, is one possible explanation considered in this article.

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More Papers From This Author in World Economics:

The Promotion Test

The collapse of broadcaster ITV Digital owing £178m to the English Football League will cause, according to the League’s Chairman, the financial failure of up to fifty of the seventy two clubs. If this were to happen a major restructuring of English football would have to take place, including measures to make sure it could not happen again. This paper examines the underlying causes of the crisis and proposes a simple financial stability rule that would achieve this aim. The rule, which would deny promotion to any team spending over a fixed percentage (e.g. 70%) of its income on player wages, is designed to be a minimum intervention in the operation of the football market, which has in fact worked well until now. The paper argues that because (a) financial stability is in consumers’ interests, (b) the proposed rule involves minimal intervention, and (c) since competition between clubs would remain intense, the rule would not be subject to competition law challenge.

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The Economic Impact of the World Cup

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Up for the Cup

Measured by attendance of football fans, the FA Cup is in decline. This paper reviews the evidence of this decline and suggests that the underlying cause may be the growing imbalance of competition in the Cup. The paper considers the drastic innovation that the FA introduced in 2001 to stem that decline: the allocation of prize money. The prize money scheme is described and its likely impact on the outcome of the competition is discussed.

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One of the most distinctive differences between team sports in Europe and North America is the institution of promotion and relegation. This paper looks into the history of why this institution developed in Europe but not North America, and considers what effects it may have on the competitive balance of the leagues. While dominance of the leagues by a small number of wealthy teams is a more severe problem in Europe, its effects are mitigated by the opportunity for new teams to enter from below and the excitement generated by the struggle for survival among the weaker teams.

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The Political Economy of Sport

The political constitutions of both the US and Europe provide no guidance on the role of organised sport in society. Without a proper set of rules politicians are finding sports issues increasingly hard to handle. In the US there is widespread concern at the commercial exploitation of major league sports, particularly through the relocation of franchises. In Europe there are anxieties about the increasing polarisation of wealth and the fear that traditions built up over a century will be lost. These problems are not only likely to grow, but a new dimension will develop as sports bodies seek international expansion. In the future sports businesses may become a source of trade friction between the US and the European Union.

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