Sorry Russia, Olympic Hosts Don’t Get a Long-Term Medal Boost

There’s been a lot of hand-wringing about the exorbitant cost of the Sochi Olympics. And with good reason! Purchasing everything necessary to build a lavish two-week global athletic competition is rarely a wise investment strategy.

One allure of hosting the Olympics is the prospect of home-field advantage. Research suggests that countries actually do benefit from hosting the summer or winter Olympics, particularly in sports that involve subjective judging.

There’s also the idea that hosting the Olympics can inspire new athletes, improve facilities, and be an all-around boon to a country’s Olympic program. If this were true, it would strengthen the rapidly weakening case for hosting an Olympics. So the question is, do host countries reap benefits in subsequent years?

According to two Chilean economists, Jose Contreras and Alejandro Corvalan, the answer is no. Contreras and Corvalan analyzed the 17 Summer Olympics between 1948 and 2012 to determine if there was an ex-host effect, which they defined as “the effect of hosting the Summer Olympic Games on the total number of medals in the subsequent games.” They examined the performance of countries four years prior to hosting, while hosting, and four years after hosting. Countries that made losing bids to host the Games were used as controls.

Contreras and Corvalan found no evidence that hosting the Olympics had a positive effect on performance four years later. In general, countries did about the same four years prior to hosting as they did four years after hosting.

That the advantage of hosting is short-lived lends support to the idea that it’s driven more by the crowd than by structural improvements to a country’s Olympic program. The findings also align with the broader social trend of people no longer blindly believing it’s always desirable to host a major sporting event. Even the Super Bowl can’t avoid scrutiny. The jig is up.

As for the Russians, the lesson is to get all they can out of Sochi. Don’t be surprised if in 2018 there’s a large drop-off in performance that can’t be blamed on failed score-fixing.
Contreras, J.L., & Corvalan, A. (2014). Olympic Games: No legacy for sports Economics Letters DOI: 10.1016/j.econlet.2013.12.006

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