In the wake of the recent Olympic winter games in Sochi, Russia, a number of economists have mounted theories linking success at Winter Olympics with economic development for participating countries.
One such research paper by two French professors purports that the number of Olympic medals a country wins is directly correlated to that nation’s population and per-capita income. Based on their calculations, the U.S. was projected to lead in the medal count with 36, followed by Germany (28), and Canada (27), with Russia and Norway tied (24) in fourth place.*
[CLICK HERE to read the article, “Predicting the Winter Olympics with Economics,” at Freakonomics.com, Feb. 11, 2014.]
[CLICK HERE to read the article, “A Strong Economy Is the Secret to Winning Medals at the Winter Olympics,” at BusinessInsider.com, Feb. 9, 2014.]
Then there’s the question of how much being the host country for the Olympics can help that nation’s economy. In the case of Russia, its economy grew by only 1.3 percent in 2013, following a 7 percent average annual rate in the first eight years of Russian President Vladimir Putin’s rule.
The Russian government banked on the idea that hosting the Winter Olympics would have a significant long-term impact on the country’s economy. Money that could have been spent on schools, hospitals and general infrastructure was allocated to the construction and modernization of the airport, 260 kilometers of roads, highway interchanges and bypasses; 200 kilometers of railway, 54 bridges and 22 tunnels; 14 brand new venues and 19,000 hotel rooms.
Apparently the winter games are more expensive to plan and train for than the summer games. The investment to host this Olympic event was said to cost around $50 billion. Clearly, a lot of people had to be interested in visiting Sochi — which was only just developed as a ski resort destination in preparation for the event — for the games to deliver long-term returns to the host country.
[CLICK HERE] to read the article, “Are the Sochi Olympics Economically Worthwhile?” at DailyForex.com, Feb. 12, 2014.
[CLICK HERE to read the article, “Sochi Olympics: Going for the Gold, Spending in the Red,” at NBCnews.com, Feb. 14, 2014.]
Then again, a few of those new 19,000 hotel rooms weren’t quite finished. In fact, journalists from around the world had a field day tweeting about their accommodations, ranging from unfinished rooms to undrinkable water.
[CLICK HERE to read the article, “Journalists at Sochi are Live-Tweeting Their Hilarious and Gross Hotel Experiences,” from The Washington Post, Feb. 4, 2014.]
[CLICK HERE to read the article, “Images from Sochi: From the Bizarre to the Sublime,” at CBSnews.com, Feb. 8, 2014.]
If there’s a lesson we as individuals can take from this year’s Winter Olympic Games, it’s the importance of carefully considering our return on investment before we make an expensive purchase. Well, that and to pursue our dreams with passion and commitment the way our heroic Olympians do.
*Actual medal count rank was Russia (33), United States (28), Norway (26), Canada (25), Netherlands (24) and Germany (19).
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