Olympics 2016: can you value gold medals in Big Macs?

Using forex prices, GDP and the Big Mac index, which team came away from Rio with the most valuable medal haul in their home country?

Olympic medals
Source: Bloomberg

Before Rio 2016 got underway, we took a look at the changing value of a gold medal over the past 20 years, noting that Olympians in Rio were competing for medals worth significantly less than at London 2012.

In the run up to the games, much was made about richer countries having a major advantage when it comes to getting golds. So has this proved correct with this year’s medal table – and which team has returned with the most valuable golds when we take forex movement, GDP and PPP into account?


Four years of Forex

We know, for instance, that the six grams of gold in a medal is currently worth $257.2, $55.6 less than it would have been in 2012. That gives the US total of 46 golds a value of $11,830, or $2558 less than it would have been in 2012 (when their 46 golds were worth $14,388).

Team GB’s 27 gold medals, meanwhile, were worth £5383 back in 2012. Thanks to the recent depreciation of the pound against the dollar, they are now worth £5315: a drop of just 1.3% compared to the US’ 17.8%.

But that is nothing when compared to Russia. Russia’s gold medal haul may have been reduced by three thanks in part to the bans imposed on many of their athletes, but that is more than offset by the 76% rise in the value of each medal. Indeed, even with the reduction in medals, Russia’s total golds at Rio 2016 are worth 52% more than at 2012. And out of the best performing teams, that is enough to see them top the table of the biggest cash increases in gold value by country.

Country Golds 2012 value in local currency 2016 value in local currency %
Russia 19 189,264.79 332,409.85 76%
Brazil 7 4,416.08  5,772.85  31%
Australia 8 2,365.77  2,704.31 14%
Japan 12 293,235.91 310,791.85 6%
Hungary 8 564,848.70 565,231.32 0%
Kenya 6 157,706.71 156,340.58 -1%
Great Britain 27 5,383.22 5,315.27 -1%
Germany 17 4,326.56 3,876.12 -10%
Italy 8 2,036.03 1,824.05 -10%
Netherlands 8 2,036.03 1,824.05 -10%
Spain 7 1,781.53  1,596.05 -10%
France 10 2,545.04 2,280.07 -10%
China 26 51,732.88 44,533.38 -14%
United States 46 14,388.11 11,830.29 -18%
South Korea 9 3,198,937.17 2,600,699.18 -19%

Table 1: 2012 to 2016 medal value, top 15 countries at Rio 2016


But what if we take GDP into account? For the top performers at the Olympics, the GDP to gold medal correlation certainly bears true. The US have once again dominated the medal table, and have a GDP almost equal to the rest of the top five combined. 

But by measuring the percentage of a country’s GDP (listed below in millions) that would be made up by its gold medal tally, we see that the picture is actually far less clear. In fact, that ratio puts the US as one of the most underperforming nations at the Olympics if GDP is taken into account (ignoring India, who managed zero golds despite having the world’s seventh biggest economy).

Country Golds GDP (in $mil) % GDP ($mil) from golds
Indonesia 1 936,955 0.027%
China 26 11,383,030 0.059%
United States 46 18,558,130 0.064%
Japan 12 4,412,600 0.070%
Canada 4 1,462,330 0.070%

Table 2: GDP vs gold medals, five worst performers

As for over-performers, Fiji’s single gold looks a lot more impressive when compared to its GDP of just $4964 million (meaning that the gold value is equal to 5.18% of their GDP in millions). And out of the top performing countries at the Olympics, fifteenth-placed Kenya takes the crown with 6 gold medals that make up 2.385% of its GDP in millions.

Country Golds GDP (in $mil) % GDP ($mil) from golds
Kenya 6 64,688  2.385%
Hungary 8 117,729 1.748%
Russia 19 1,132,740 0.431%
Netherlands 8 762,521  0.270%
Great Britain 27 2,760,960 0.252%
South Korea 9 1,321,200 0.175%
Australia 8 1,200,780 0.171%
Spain 7 1,242,360 0.145%
Germany 17 3,467,780 0.126%
Brazil 7 1,534,780 0.117%
Italy 8 1,848,690 0.111%
France 10 2,464,790 0.104%
Japan 12 4,412,600 0.070%
United States 46 18,558,130 0.064%
China 26 11,383,030 0.059%

Table 3: GDP vs gold medals, top 15 countries at Rio 2016


But as many economists will tell you, GDP is a flawed way of measuring wealth in a particular economy. Perhaps, then, The Economist has a better method of evaluating the value of a gold medal in each competing nation: the Big Mac index.

As The Economist notes, the average cost of a Big Mac in a country can provide a measure of purchasing power parity, usually measured using a basket of goods and services. Applying the theory of the Big Mac index to our medal table leads to a simple point of comparison – how many Big Macs could be bought with the gold medal haul of each country?

Despite having some of the cheapest Big Macs in the world (behind only Malaysia and Ukraine) Russia’s lower medal haul means that they are unable to match some other countries when their golds are valued in Big Macs. Had Russia managed to match their 2012 haul of 22 golds, for instance, they could have bought an impressive 2,760 burgers.

And that means that they fall behind the winner in terms of Big Macs bought with gold medals, China. China’s relatively cheap burgers, at $2.79 to Russia’s $2.05, mean that it edges past Russia (2383) and the US (2347) with a gold medal haul worth 2,401 Big Macs.

Country Golds Big Mac cost Gold value in Big Macs
China 26 2.79 2401
Russia 19 2.05 2383
United States 46 5.04 2347
Great Britain 27 3.94 1762
Germany 17 4.17 1048
Japan 12 3.47 890
Hungary 8 3.15 653
South Korea 9 3.86 600
France 10 4.51 570
Netherlands 8 3.80 542
Australia 8 4.30 478
Spain 7 3.85 467
Italy 8 4.62 445
Jamaica 6 0.00 0*
Kenya 6 0.00 0*

Table 4: Gold medal value in Big Macs, top 15 countries at Rio 2016

*Jamaica and Kenya do not have any McDonald’s outlets, and therefore do not feature in the Big Mac index.

So while China may be reflecting on a disappointing competition in which they slipped behind Team GB in terms of overall golds, they can take some solace from the 2401 Big Macs they could now buy with the precious metal in their medals.  

And Russia may have had to contend with bans on many of their athletes, but won golds worth 76% more than four years ago, 0.431% of their GDP in millions and 2383 Big Macs – ranking them first, third and second respectively out of the top performing teams.

This piece is part of our series on Rio 2016. For expert analysis, Brazilian trading opportunities, and more, take a look at our Rio 2016 page.

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