Where is victory most certain? The level of luck-based noise factor in Summer Olympic Games

Gergely Csurilla (), András Gyimesi, Erika Kendelényi-Gulyás and Tamás Sterbenz
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András Gyimesi: Doctoral School of Regional Policy and Economics, University of Pécs, Pécs, Hungary
Erika Kendelényi-Gulyás: Sport Economics and Decision-Making Research Centre, University of Physical Education, Budapest, Alkotás u. 44, H-1123, Hungary
Tamás Sterbenz: Sport Economics and Decision-Making Research Centre, University of Physical Education, Budapest, Alkotás u. 44, H-1123, Hungary

Acta Oeconomica, 2021, vol. 71, issue 3, 369-386

Abstract: We describe a statistical approach for the measurement of the newly defined luck-based noise factor in sports. It is defined as the difference between the actual outcome and the expected outcome based on the model predictions. We raise the question whether some sports exhibit a higher level of noise-factor than others, making investments in that sport riskier. Data from 14 individual sports in six Summer Olympic Games between 1996 and 2016 were included in the analysis. Market shares are predicted by the autoregressive linear and zero-inflated beta regression models with exogenous variables, where the higher Normalized Mean Squared Error indicates a higher noise-factor. Modern pentathlon, tennis and cycling showed the highest noise-factors, whereas swimming, table tennis and athletics were the least noisy. Possible reasons are discussed in the paper. Our analysis indicates that countries with suitable resources producing leading elite Olympic athletes are predicted to achieve higher success in sports with a lower noise-factor such as swimming. In contrast, investments in noisy sports, such as e.g., modern pentathlon, are associated with a higher risk.

Keywords: sports economics; olympic games; luck-based noise factor; market share; zero-inflated beta regression (search for similar items in EconPapers)
JEL-codes: C35 L83 Z29 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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