Sunday, 16 February 2014

Olympic gold and cash

I came across an info graphic from CBC about which countries pay money for winning Olympic medals.

Figure 1. From CBC website 
My first reaction was there wasn't much correlation between either how many medals the country actually won and how much the athlete got paid for gold. Nor is it clear how much these athletes get paid, if anything, when not winning gold. Most likely the wealthier countries pay their athletes some stipend when training. Then again, poorer countries may have elite training programs, assuming you qualify for one such as Russia's Red Army.

Nevertheless, since winning gold is rarely, if ever, a reliable source of income I figured these cash prizes were a form of saving face for the countries themselves and less so for rewarding athletes. It's as if to say "look, we don't shortchange our athletes, at least if they are winning".  I wondered if there was a correlation between the prize money and the general wealth of these countries per capita. Hence I took the figure 1 prize values and plotted them against GDP.

Figure 2: Olympic prize money compared with GDP per capita wealth per country

The correlation is not perfect, but the results are relatively clear: poorer countries give relatively more money to the winning athletes than richer ones. My guess is that these athletes make little money and to avoid the embarrassment of having a gold medalist living in poverty, it would be wiser from a publicity point of view to reward them enough to live comfortably in future years, or at least until they are forgotten.

There is a deeper significance to the negative correlation in figure 2. Wealthier countries can potentially afford larger medal prizes than poorer ones. And poorer countries don't win enough medals for these payouts to be a significant cash drain. Hence the absolute money given out to athletes is rather arbitrary.  Canada pays out $20,000 per gold medal. This is a pittance when you consider the years of effort required to earn one. An annual graduate stipend in a canadian science program is more than 20 grand, which is also small, and there are a lot more graduate students than Olympics athletes in Canada. The majority of legitimate money comes from sponsorship deals like commercials and public appearances for talks. Is this a good point in favour of capitalism in amateur sports? I need to look into this a little deeper.

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