Abstract: The psychological effects of Olympic gold medals on residents and the residents' attitudes towards elite sports concern the legitimacy and rationality in the investment of public funds to develop elite sports, to some extent. Based on social identity theory, the psychological impacts of Olympic gold medals and potential factors were explored through an empirical survey with data collected from 1697 Chinese citizens over 16 years old. Results showed that respondents were willing to increase public financial investment to support elite sports, confirming the legitimacy of sports policy in China. And, national identity and the perception of the nature of the Olympic Games would positively affect the psychological impact of Olympic gold medals, confirming the relevance of social identity theory in explaining the relationship between perception and psychological effect.