With new problems emerging every day in Rio, Brazil may well be regretting its decision to host the 2016 Olympic Games. However, Goldman Sachs may have just provided a ray of hope for weary Brazilians: The host country usually wins more medals.
Before the London Olympics in 2012, Goldman Sachs published a report examining a country’s economic conditions and its Olympic performance. Looking at past Olympics, the report correlated each country’s overall growth environment (GES) with its medal attainment.
It found that the most important factors in winning medals were political stability and the microenvironment (which includes the costs of starting a business and the level of urbanization). The next most important variables were human capital (life expectancy and education) and the use of technology. Additionally, Goldman found that hosting the Olympics can boost not only the local economy but also the national medal count.
The 2012 report predicted that Great Britain would win 18 more medals in London that year than it did in Beijing in 2008 – and it got that number exactly right, with the UK bringing home 65 medals. The model also successfully predicated ten of the eleven top-scoring nations.
Looking to repeat their success, Goldman has released their medal predictions for Rio 2016, shown in the table below:
With a fairly high growth score and population size, United States is predicted to bring home the most medals, 45 golds and 106 overall. The economic turmoil of Brexit and the loss of home country advantage leaves Britain with 6 fewer medals than in 2012. But while Britain was nearly twenty medals behind Russia in 2012, the banning of more than 100 Russian athletes means that Britain will likely beat Russia this year. South Korea is a good example of the medal boost provided by a strong economy; despite a population of only 51 million, South Korea is expected to rank 5th among countries in gold medals.
Brazil’s politics are turbulent, and President Dilma Rousseff may be impeached in the next few weeks. Its economy is witnessing the worst recession since the 1930s. Thousands of Brazilians are taking to the streets to protest the games. Yet despite all the economic and political turmoil, the home country advantage remains. Brazil is expected to win 22 medals, an all-time record for the country. The Olympics may be a mixed blessing for the country overall, but Brazil’s athletes should provide some excitement and pride for the struggling nation over the next few weeks.