Reversed causality can be lots of fun

What if performance of professional swimmers affected country’s wealth?

We believe that economics research is not only intellectually stimulating but fascinating as well. We made this short video as a funny supplement to the term project in professor Békés’ Data Analysis class at the Central European University.

In our term project we aimed at finding a relationship between the economic indicators and the number of medals that countries won in FINA World Swimming Championship in 2013. We identified several significant predictors, such as Current GDP, Population and Land Area. Thus, the bigger and richer the country the more medals it is expected to win (pretty straightforward, isn’t it?). What is interesting is that GDP per capita is not important for winning medals. In addition based on existent models in literature, we checked Population under 15 year-old, Health Expenditures (both total and per capita) and Life Expectancy. As it turned out, there were no relationships between these indicators and the number of medals countries won.

The idea of this video occurred to me when I imagined what it would be if in our model there was a reversed causality. What if the number of medals actually influenced the volume of GDP and the future of the countries’ prosperity would be in hands of few brave swimmers? 🙂

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