Summer Olympics:

Cash for Gold

With the 2016 Summer Olympic Games upon us, we wanted to know if there was a link between the number of medals won and the level of pay in those countries. The Olympics motto "Citius, Altius, Fortius" meaning "Faster, Higher, Stronger", one can wonder whether "higher" refers to the height of athletes' jumps, their compensation or professionals' compensation in their country.

We have analysed 6,731 salaries of IT professionals in 21 countries and correlated them with the number of medals won in the 2012 games. The salaries were used as an indicator of a country's economic prosperity. We also compared the monetary reward per gold medal with the salaries of 2,974 front-office VPs in Investment Banking. There are strong correlations between medals won and salaries, even though other historical factors and incentivising strategies add a layer of complexity to the analysis.

Wealth and Medals

The Star-Spangled Banner

The USA, one of the highest income countries in IT, won the most medals in the 2012 Olympics. No doubt Michael Phelps, who is the most-decorated Olympic athlete of any nation (with 6 Olympic medals in 2012 including 4 golds) played a great role in this achievement. However, while the yearly income in Switzerland is 33% larger than the United States, they came in 33rd in regards to the number of medals won. For the Winter Olympics though, the Swiss ranked 7th. Clearly a matter of topology in this case!

India lags behind

Population size is considered a statistically significant factor when it comes to reaping good results at the Olympics [2]. India -the second most populous country of the world with its 1.25 billion inhabitants [3] - goes against this trend however. Looking at India's salary data, it offers the lowest level of pay which could go some way to explaining its low medal count. All the more since India favours sports such as cricket, that are not Olympic disciplines.

Russia: serious state funding?

Russia may be on the lower end of the median compensation offered but outperforms most other countries in its performance at the Olympics. The Russian state has a vested interest in doing well in the Olympics, a key indicator of national greatness in which Russians take great pride!

Bring home the gold: What is it worth?

Countries which only rarely win tend to offer the substantial rewards to gold medal winners as incentive: in 2012, Singapore offered the equivalent of three investment banking VPs' earnings (£500,000) to gold medallists [4], which however did not yield any results. The US though, consistently in the top three, offered £16,000 per gold medal which is 38 times less than what a VP in banking makes per year. The UK decided not to reward its athletes in 2012, but to grant other benefits such as designing stamps bearing the golden athletes' image. This strategy definitely worked since the UK team still won 29 gold medals!

Monetary incentives have little effect on an athlete's performance which is usually tied to the budgets allocated to sports facilities by each country. All the more since the prestige attached to winning an Olympic medal both for individual athletes and national perception is difficult to rival when it comes to sporting achievement. Athletes should not be concerned about prize money as they are likely to negotiate lucrative private sponsorship deals on the back of their success.

[1] 2012 Summer Olympics Medal Table
[2] Modelling Olympic Performance
[3] Demographics of India
[4] National Olympic associations bonuses for gold medals

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