Bill Easterly makes a joke about trying to measure the
impact of participating in the Olympics influence on winning medals. For
countries who didn’t earn medals in London a study would show participating has
no influence on medals earned. At the core of the joke is you should carefully
choose what you are measuring. International aid programs might increase school
enrollment or the number of businesses but it might not increase income or the
number of PhD earned.
What is the goal of countries like Chile who didn’t win any
medals at the Olympics? Was it a complete failure if a country goes home
without any medals? I don’t think the
Jamaican bobsled team (made famous by the movie Cool Runnings) would consider
their participation and last place finish in the 1988 Olympics a failure. Even the bobsled team used that event to build
toward eventually having a Jamaican win a bobsled medal at the 2006 Olympics.
So perhaps participating with little chance of winning increases future chances
of medals.
The next question is what is the value to a country of an
Olympic medal? For a smaller country like say Costa Rica, there was a lot of
national pride gained by Claudia Poll’s 1996 Gold medal and when I was there in
2000 the country was very excited to watch her swim again. I think an economic
value could be put on this pride. Typically economists would use a method
called Contingent Valuation where they survey people how much is a medal for
your country worth to you or even ask people to donate or pay taxes to a
national Olympic committee. This paper by Brad Humphreys and others suggests Canada's big investment in 2010 paid off 2-3 times the cost based on surveying people's value of Olympic medals.
It is unclear how much a country like Chile or Costa Rica
should invest in Olympians, but economic tools can help find the answer. My
guess is that the answer is not zero, unless like the United States the market
takes care of this investment through sponsorships.
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