1.

Introduction
With the recent summer and winter Olympics concluded at Rio, Brazil, much of the
attention also went into statistics such as medal count per capita or medals won per unit
GDP. In view of this, we conducted this study to examine any possible relationship
between the medal count of a country in Olympics and its broad socio-economic
indicators. Due to sporadic nature of the socio-economic data on public domain (for 71
countries considered), only GDP (in million USD) and Population (in millions) was
used as explanatory variables

2. Data Description
Data has been extracted from the following sources

Olympic Medal Tally: IOC database (https://www.olympic.org/olympic-results). Data

for Rio 2016 and London 2012 summer Olympics has been used and all medal winning
countries have been taken in building the model

Socio-economic indicators: GDP and the total population of the country were taken into
consideration. This data (for all the medal winning countries) was referred from the
World Bank database (http://data.worldbank.org/)

3. Empirical Analysis:

Model:

Multiple regression frameworks

Y=c(1) + c(2)*x1 + c(3)*x2 + u where u ~ N (0, 2)

Here,
Dependent Variable,
Y= Total medal count of a country

Explanatory Variables:
X1= GDP of the preceding year (e.g. for Rio 2016, GDP for year 2015 was taken)
X2= Population of the preceding year

Equation to be estimated

Medal = C (1) + C (2)*GDP + C (3)*POP + u

Regression on EVIEWS:

Running the regression on EVIEWS, we get the following result:

ls toal_2016 c gdp_2015 pop_2015
 Dependent Variable: TOAL_2016
Method: Least Squares
Date: 09/21/16 Time: 23:03
Sample: 1 71
Included observations: 71

Variable Coefficient Std. Error t-Statistic Prob.

C 7.371363 1.194431 6.171444 0.0000

GDP_2015 7.42E-06 5.19E-07 14.28221 0.0000
POP_2015 -0.013580 0.005835 -2.327105 0.0229

R-squared 0.780633 Mean dependent var 13.30986

Adjusted R-squared 0.774181 S.D. dependent var 19.58249
S.E. of regression 9.305685 Akaike info criterion 7.340463
Sum squared resid 5888.513 Schwarz criterion 7.436069
Log likelihood -257.5864 Hannan-Quinn criter. 7.378483
F-statistic 120.9913 Durbin-Watson stat 0.724386
Prob(F-statistic) 0.000000

Although the output seems to be satisfactory with respect to t-stat and F-test, the Durbin-Watson
stat is below the optimum level of 2. Therefore a serial correlation test was conducted to determine
autocorrelation. The following output was obtained:

Breusch-Godfrey Serial Correlation LM Test:

F-statistic 44.51019 Prob. F(1,67) 0.0000

Obs*R-squared 28.34022 Prob. Chi-Square(1) 0.0000

Test Equation:
Dependent Variable: RESID
Method: Least Squares
Date: 09/21/16 Time: 23:08
Sample: 1 71
Included observations: 71
Presample missing value lagged residuals set to zero.

Variable Coefficient Std. Error t-Statistic Prob.

C 0.032032 0.932747 0.034341 0.9727

GDP_2015 -5.41E-07 4.14E-07 -1.308284 0.1952
POP_2015 0.005513 0.004631 1.190295 0.2381
RESID(-1) 0.648809 0.097249 6.671596 0.0000

R-squared 0.399158 Mean dependent var -9.76E-16

Adjusted R-squared 0.372255 S.D. dependent var 9.171784
S.E. of regression 7.266839 Akaike info criterion 6.859209
Sum squared resid 3538.065 Schwarz criterion 6.986684
Log likelihood -239.5019 Hannan-Quinn criter. 6.909901
F-statistic 14.83673 Durbin-Watson stat 1.782187
Prob(F-statistic) 0.000000

The above output makes us accept the null hypothesis that autocorrelation exists in the model.
Running the modified regression on EVIEWS, we get the following result:
ls toal_2016 c gdp_2015 pop_2015 ar(1)

Dependent Variable: TOAL_2016

Method: ARMA Maximum Likelihood (BFGS)
Date: 09/21/16 Time: 23:10
Sample: 1 71
Included observations: 71
Convergence achieved after 8 iterations
Coefficient covariance computed using outer product of gradients

Variable Coefficient Std. Error t-Statistic Prob.

C 12.54030 8.396173 1.493573 0.1401

GDP_2015 4.66E-06 4.29E-07 10.86350 0.0000
POP_2015 -0.015243 0.003567 -4.273048 0.0001
AR(1) 0.901481 0.046751 19.28252 0.0000
SIGMASQ 33.46629 4.787051 6.991003 0.0000

R-squared 0.911482 Mean dependent var 13.30986

Adjusted R-squared 0.906117 S.D. dependent var 19.58249
S.E. of regression 6.000135 Akaike info criterion 6.512851
Sum squared resid 2376.107 Schwarz criterion 6.672194
Log likelihood -226.2062 Hannan-Quinn criter. 6.576216
F-statistic 169.9026 Durbin-Watson stat 2.561502
Prob(F-statistic) 0.000000

Inverted AR Roots .90

The output now seems satisfactory but the t-test for constant C tells that C is insignificant. This
seems quite consistent with the real world, since no GDP and no Population would never be a
characteristics of a participating country. The equation was re-run without C. The output was:

Dependent Variable: TOAL_2016

Method: ARMA Maximum Likelihood (BFGS)
Date: 09/21/16 Time: 23:27
Sample: 1 71
Included observations: 71
Convergence achieved after 10 iterations
Coefficient covariance computed using outer product of gradients

Variable Coefficient Std. Error t-Statistic Prob.

GDP_2015 4.49E-06 4.65E-07 9.656103 0.0000

POP_2015 -0.015054 0.003404 -4.422149 0.0000
AR(1) 0.960525 0.019904 48.25778 0.0000
SIGMASQ 34.13694 3.918129 8.712562 0.0000

R-squared 0.909708 Mean dependent var 13.30986

Adjusted R-squared 0.905665 S.D. dependent var 19.58249
S.E. of regression 6.014563 Akaike info criterion 6.516974
Sum squared resid 2423.723 Schwarz criterion 6.644449
Log likelihood -227.3526 Hannan-Quinn criter. 6.567667
Durbin-Watson stat 2.696377

Inverted AR Roots .96

 160

120

80

20 40

10 0

0 -40

-10

-20

-30

ARM
USA

AUS
ITA

BRA

CZE

HRV

CHE

SGP

TJK
CAN

BLR
IRN

ROU

LTU
TUR
NOR

GRC
IDN
GBR

MAR
BEL
GEO

QAT
Residual Actual Fitted

Estimated equation
TOAL_2016 = 4.48848298397e-06*GDP_2015 - 0.0150535227863*POP_2015 +
[AR(1)=0.960525382457,UNCOND]

4. Conclusion

Based on the above study, it was found out that GDP and Population of a country are
sufficient explainers for the Olympic performance. However, against what conventional
wisdom would hold, medal count seems to be inversely related with the population of the
country. A regression model on London 2012 series also resulted in similar results.

Another metric of GDP per capita was tested in one of our models but it resulted in 5 to 6%
R2. Therefore, the following equation would result based on the limited scope of our study.

TOAL_2016 = 4.48848298397e-06*GDP_2015 - 0.0150535227863*POP_2015 +

[AR(1)=0.960525382457,UNCOND]