Welfare Optimal Distribution of Olympic Success Considered as a Public Good

32 Pages Posted: 14 Jun 2007

See all articles by Loek F. M. Groot

Loek F. M. Groot

Utrecht University - School of Economics

Date Written: March 2007

Abstract

This study considers the performance of countries at the Olympic Games as a public good and investigates different welfare optimal distributions of Olympic success. Firstly, it is argued that, at the national level, Olympic success (measured as the number of gold medals won) meets the two key conditions of a public good; non-rivalry and non-excludability. Secondly, it is demonstrated that standard income inequality measures, such as the Lorenz curve and the Atkinson's measure can be successfully applied to the distribution of Olympic success. Four different distributions are considered: the actual distribution, the distribution according to population shares, the distribution under constant and declining marginal utility of medals, and the one also taking production costs and declining marginal utility of per capita income into account. For the latter two, the rules for the welfare optimal distributions are stated, viz. equality of the marginal contributions to welfare and the Samuelson condition. By way of conclusion, this paper proposes a device to make the distribution of Olympic success more equitable.

Keywords: Olympic Games, public goods, externalities, social welfare

JEL Classification: D63, H41, H50

Suggested Citation

Groot, Loek F. M., Welfare Optimal Distribution of Olympic Success Considered as a Public Good (March 2007). Available at SSRN: https://ssrn.com/abstract=991801 or http://dx.doi.org/10.2139/ssrn.991801

Loek F. M. Groot (Contact Author)

Utrecht University - School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, 3584 EC
Netherlands

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