Olympic economics

Tyler Cowen and Kevin Grier make some predictions:

  1. Medal totals will become more diversified over time. The market share of the “top 10” countries will continue to fall (it was 81 percent in 1988) as economic and population growth slows in the rich world. The developing world has greater room for rapid economic growth, and most parts of the developing world also have higher population growth. The Olympic playing field will get more and more level.
  2. Japan will continue to fade, mostly because of aging and population shrinkage.
  3. Italy will follow Japan for similar demographic reasons, as well as because the Eurozone crisis will continue to cut into budgets, training and otherwise.
  4. Since Rio is host to the next Olympics, Brazil should do better than expected due to the “pre-host” bump.
  5. Many African nations will rise. Currently about half of the approximately 1 billion people in Africa have a cell phone, and the middle class is growing. The chance that an African star will be spotted and trained at the appropriate age is much higher than before. Africa also continues to grow in population, and that means lots of young people. Most of us still think of African nations as very poor, but infant mortality has been falling and per-capita income rising across Africa for the better part of a decade now.
  6. China will level off and then decline as a medal powerhouse. In less than 15 years, the typical person living in China is likely to be older on average than the typical person living in the United States, in part due to the country’s one-child policy. As of 2009 the number of over-60s was 167 million, about an eighth of the population, but by 2050 it is expected to reach 480 million people older than 60, with the number of young Chinese falling. The country will become old before it is truly wealthy.

With some small edits that could almost serve as a prediction of the changing face of global politics, too.

  • You forgot to add tax policy. An academic, peer reviewed paper commissioned by the EU, and promulgated by Greens, Maori Party and Labour in New Zealand, and Obama in the US under the slogan ‘you did not really win that, society did’, showed that the winning of medals momentarily was able to lift the spirits of their depressed populaces, so a progressive tax was instituted on medalists in most Western jurisdictions, in the form of a 100% tax on advertising revenues for gold medalists for four years after winning, 50% tax on silver medalists, and 35% on bronze medalists. This tax was to be dedicated to fund the inception of sports academies in the schools, although in a controversy which later erupted was found to have mostly been used to prop up the consolidated fund. A massive 30% of the medalist taxes in Australia and New Zealand were found to have been spent on buying condoms for their teams in the games in Rio. In the mid 21st century games held in Cairo, African nations, where it was estimated 60% to 70% of medalists from Europe, US and Australasia had voluntarily tax exiled themselves to, won the biggest haul of gold medals of any continent in the history of the Olympics. Four marathon swimmers were eaten in the Nile.

    • Ha, good stuff! I wonder what actually happens to their winnings, given that they’re heavily publicly funded.

  • rahul kumar

    Since Rio is host to the next Olympics,