In a few short days, the Olympic torch will make its way to the opening ceremonies of the Rio de Janeiro Olympics, marking the start of the XXXI Olympiad. While the Olympics are an exciting time of national pride and athleticism, they are often accompanied by controversy. Hosting the games can be contentious, as many economists question the tradeoffs associated with spending billions of dollars for such a short, specialized event. This year’s games in Rio are no exception: from political and economic instability to institutional doping scandals affecting national teams to concerns over the Zika virus and public safety, it’s clear that the reach of the Olympics’ influence transcends numerous boundaries. These issues are all on a very big-picture scale—but what about the athletes themselves? How can we use economics to look at the impact of the Olympics on the athletes?
Olympian Gabby Douglas (Source)
One of the first concepts anyone learns in an introductory economics class is opportunity cost, or what you give up to get what you want. For example, if I decide to go to an Orioles game (Let’s go O’s!) on a Friday night, I am not going to see a movie: that is what I do not do so that I can go to the O’s game. In other words, the opportunity cost is what I give up (enjoying a movie) because I choose to do something else. The principle can also be applied to the decision that athletes make when they choose to train for and compete in the Olympics. The dedication and time commitment required to become a world-class athlete leaves little time for anything else, such as advanced education, a social life, or a traditional start to a career. These opportunity costs can have long-term ramifications with respect to the transition out of the Olympian lifestyle, as well as lifetime earning potential. In addition to forgoing full time employment—and full time pay—in the present, these athletes may be forgoing the opportunity to make connections or gain experience that will allow them to move up the career ladder.
Olympian Michael Phelps (Source)
And while it is true that some athletes, such as Baltimore’s own Michael Phelps, land endorsements and sponsorships that financially sustain them, most athletes are not as lucky. Some athletes receive small stipends from either the U.S. Olympic Committee (a nonprofit corporation) or their respective national sports associations, but these stipends account for less than minimum wage. In fact, the United States is one of the few countries that does not provide federal support for Olympians. Meanwhile, the costs associated with intense training—such as coaching, uniforms, gym fees, travel expenses, physical therapy, and sports medicine—can quickly add up. For example, Olympic swimmers can spend upwards of $500 for a swimsuit that they wear for an average of six swims, and a fencer can spend over $1,200 on her full uniform. Clearly, athletes sacrifice a lot in pursuit of their Olympic dreams. In economics, one way of assessing tradeoffs is by benefit/cost analysis, or looking at the pros and cons of a decision before deciding if it’s “worth it” or not.
Vinicius and Tom, the mascots of the Rio Olympics, are excited for the games to begin. (Source)
Olympians are a special class of athlete with high levels of focus and dedication to their sport. In addition to the physical toll that training and competing takes, they make many sacrifices to perform at such an elite level. Considering that so few athletes have any chance of winning a medal, some may question the return on investment in terms of the sheer amount of time and money spent trying attain something so improbable (There are over 10,000 athletes competing for medals in just over 300 events). However, I would argue that most, if not all, Olympic athletes are competing out of love for their sport, rather than monetary gain. So while the economic rationale for competing in the Olympics might be shaky at best, being among the world’s best athletes, representing their countries, and being able to call themselves Olympians are reasons enough.
