Scoring to Score in the WNBA

Is scoring overvalued in other leagues besides the NBA? Kevin Pelton, one of my competitors in the True Hoop Stat Geek Smackdown, points out an interesting example from the WNBA (which he covers in addition to the NBA) that indicates a strong relationship between scoring and accolades in that league as well. 

WNBA.com publishes Rookie Rankings weekly, and this week’s leader is Ashley Shields of the Houston Comets. Shields has been inefficient (to say the least) so far, shooting 27.5% from the field and committing 13 turnovers in three games. What category (besides turnovers) does Shields lead rookies in? Scoring, of course, as she’s averaged 15.0 points per game. Other rookies have also struggled early in the season, but Shields seems like a poor choice when we consider the rest of her game in addition to scoring.Perhaps this is a good research topic: How does the evaluation of WNBA players differ from what we see in the NBA?  Do WNBA players have the same incentive to focus on scoring totals? 

By the way, I hope for more posts like this one, which was less than 300 words.  Yesterday’s post on Chris Paul was nearly 1,400 words, which is way too long.  Basically, the more I write, the higher my costs in time and effort. And the more I write, the fewer comments – and I assume readers – I see.  So basically, when I post 1,400 words I am behaving irrationally (raising my costs and lowering my benefits).  Such behavior might also be a good subject for future research. 

- DJ

Defending Chris Paul

The Utah Jazz in 2005 had the third choice in the NBA draft. Needing a point guard, they had a choice between Deron Williams and Chris Paul. The college numbers of the two players clearly indicated that the best choice was Paul.

Table One: Williams and Paul in College

The data reported in Table One comes from each player’s last season of college basketball. As we can see, Paul was superior with respect to shooting efficiency from the field, free throw percentage, scoring, rebounds, and steals. Not surprisingly, Paul posted a much higher Win Score per minute (0.256 vs. 0.150). Although college data does not tell us everything about a player’s pro potential, the differences between Paul and Williams in college should have given the Jazz second (and third, fourth, and fifth) thoughts about passing on Paul.

Nevertheless, the Jazz selected Williams. Unfortunately for the Jazz, the rookie production of each player confirmed the college numbers. Paul produced 18 wins his rookie campaign, a mark for freshmen that in the past fifteen years has only been bested by Tim Duncan and Shaquille O’Neal. Williams, meanwhile, produced 0.9 victories his rookie campaign. The difference was not just seen in Wins Produced. Paul went on to be Rookie of the Year, a unanimous selection to the All-Rookie team (voted on by the coaches), and was also named the starting point guard for Team USA in the 2006 World Championship. In sum, few people would argue last summer that Williams was even close to Paul as a player.

The sophomore campaign for each player went differently. Williams improved dramatically, producing 9.2 wins and posting a Wins Produced per 48 minutes of 0.149. The Utah Jazz also improved, going from 41 victories in 2005-06 to 51 wins this past season. Beyond improving in the regular season, Williams has apparently shined in the playoffs. Utah is currently playing in the Western Conference Finals, which hasn’t happened since John Stockton and Karl Malone led the franchise to the NBA Finals in 1998.

The dramatic improvement in the performance of Williams and the Jazz has caused an equally dramatic change in people’s assessment of his value. Although many of have voiced this sentiment, I think Henry Abbott of TrueHoop put it best yesterday:

I know he is not getting his fair share of attention without help from me, but how great is Deron Williams. Would you trade him for Chris Paul? Would anyone? This is also instructive when it comes to assessing the draft. Chris Paul has been declared the better pick on the short analysis, but the more important analysis is much longer.

Abbott is not alone in thinking that Utah’s run in the playoffs has vindicated the decision to take Williams over Paul. Unfortunately, I think the data still tells us that Utah’s selection was incorrect.

Comparing Williams and Paul in 2006-07

Although Williams did do better his sophomore campaign, it’s still the case that Paul is more productive. Paul – who missed substantial time due to injury – still managed to post 13.2 wins this past season. Only Chauncey Billups, Steve Nash, and Jason Kidd produced more wins from the point guard spot. Furthermore, Paul’s WP48 of 0.270 ranked 14^th among the 127 players with at least 2,000 minutes played (Williams ranked 49th). The difference between Paul and Williams is similar to the difference between Kobe Bryant (WP48 of 0.234) and Tayshaun Prince (WP48 of 0.135). Should the Lakers trade Bryant straight up for Prince? Would anyone suggest such a move?

The difference between Paul and Williams can also be clearly seen when we look at the individual stats:

Table Two: Williams and Paul in 2006-07

With respect to rebounds, steals, turnovers, personal fouls and free throw percentage, Paul is still the more productive performer. Williams does offer greater shooting efficiency from the field and a few more assists, but these two areas where Williams is better is not enough to close the gap between the two players.

Again, I do not think one needs Wins Produced and Win Score to see that Paul has clearly been the better player. He was better in college and better in the pros. Yet people still wish to argue that Williams is now equal or superior to Paul. What has caused this confusion?

Change Your Teammates, Change Your Evaluation

There is one area where Williams has consistently bested Paul. In both college (where Williams played at Illinois and Paul played at Wake Forest) and in Utah, Williams has played on the better team. We can see this when we look at the both the Utah Jazz and New Orleans/Oklahoma City Hornets these past two seasons.

Table Three: The Utah Jazz in 2005-06 and 2006-07

Table Four: The New Orleans/Oklahoma City Hornets in 2005-06 and 2006-07

In his rookie season, the teammates of Williams produced 33 wins and posted a 0.090 WP48. This past season the performance of his teammates improved to 39.4 wins and a WP48 of 0.112.

In contrast, Paul’s teammates only produced 15.3 wins and a WP48 of 0.043 during his stellar rookie season. This past year his teammates only offered 23.6 wins and a WP48 of 0.065. Yes, Paul did have Tyson Chandler as a teammate, but after Chandler and Devin Brown, every other teammate was below average. In fact, the Hornets allocated nearly 6,500 minutes to players whose production was less than zero.

And this is why Paul is not playing in the conference finals. His absence is not an indictment of his lack of productivity, but rather of the inability of the Hornets to surround Paul with productive players. Unfortunately, analysts have trouble separating what a player does from his teammates. Often when teammates are poor, the assessment of a “star” declines. Likewise, when teammates are better, the assessment of an individual player improves.

Is Williams a Prime-Time Performer?

Not only does Williams have better teammates, but Williams and these better teammates have spent the past six weeks playing prime-time basketball. Meanwhile Paul has been out of sight and out of mind.

Should sixteen playoff games change the conclusion we reached from two seasons worth of NBA regular season games (and a collection of college contests)? Perhaps they should if we now have evidence that Williams is really a “prime-time performer.”

What is a prime-time performer? In The Wages of Wins we reviewed a paper I wrote with Erick Eschker. This paper defined a prime-time performer as a player who raises his level of play in the post-season. In other words, he played best when the games mattered the most. Paul has been unable to lead his team into the playoffs, so we can’t see if he has this quality. Williams, though, after 16 playoff games has clearly demonstrated… okay, not really anything (by the way, we find little evidence that any player in the NBA is a “prime-time performer”, a point I made in talking about NFL quarterbacks last January).

Williams offered a per-minute Win Score of 0.141 in the regular season. After 16 playoff games his Win Score per-minute is 0.153. Yes, that is a bit better. But Williams is still offering less than what Paul routinely brings to the table.

It should be emphasized that Williams is indeed a “good” player. He was above average in the regular season. He has been above average in the post-season. And he is one of the reasons Utah has made it the conference finals. Of course, he is not the only reason. Carlos Boozer, Paul Millsap, and Andrei Kirilenko also have helped. We should also not ignore the Warriors upset of the Mavericks, since without this event the Jazz would have faced Dallas in the second round (and likely lost).

Although Williams did play well in the regular season, and has played well in the playoffs, his overall level of productivity still pales in comparison with Paul. And although I doubt the Jazz and Hornets would consider swapping point guards at this time, if such an offer was made, the Jazz would be foolish to pass on Paul a second time. Because as good as the Jazz were this year with Williams, they would still be better with Chris Paul.

- DJ

Do the Knicks Deserve a Mulligan?

William Rhoden penned a column last Friday in The New York Times entitled “Poor Decisions? Knicks Deserve a Mulligan.” Rhoden argues in this column that the Knicks penchant for making bad decisions have left the team with a roster in salary cap hell. Too many bad contracts have resulted in a team unable to make any significant roster changes for at least two years. This means two more years of losing for the richest franchise in the NBA. Given the prominence of this team to The Association, Rhoden argues that David Stern should allow the Knicks to dump contracts and move itself under the salary cap. Then the Knicks would be able to make the moves necessary to bring a contender to The Big Apple.

Okay, if you’re not a Knicks fan, this argument may strike you as silly. Why should Stern suspend the rules so that one team can get better? After all, sports are a zero-sum game. If one team gets better, others must get worse. So another way of looking at this is to ask why Stern should suspend the rules to reduce the fortunes of teams outside New York?

If we approach this problem from the perspective of a profit-maximizing league, Rhoden’s argument might make some sense. On average a win increases a team’s regular season gate revenue by less than $300,000. But in New York, this same win increases the gate by more than $500,000. Wins are thus worth more in New York, and if the league was looking to maximize the value of wins it would make sure that the Knicks won more and teams located in Minnesota or Atlanta won less.

Of course teams do not split regular season gate revenue, so increasing wins in New York only benefits the Knicks, not the other members of the Association. One could argue that the Knicks generate a larger national TV audience than a team like the Spurs (although I would need to see some data to confirm this hypothesis) and therefore it would benefit the league to put a winner in New York (since TV money is shared by the league).

Although one can question whether the league truly benefits from having a winner in New York, it’s not clear that Rhoden’s plan would actually lead to more victories for the Knicks. The Knicks, as Rhoden noted, already have the league’s largest payroll. And they have been among the league leaders in payroll and revenue for some time. Despite this advantage, the Knicks are losers.

In the Winter, 2007 issue of the Yale Economic Review I authored an article (noted prominently on the cover) examining why the Knicks are such losers. My argument should be familiar to readers of The Wages of Wins. It should also be familiar to those who read The Wages of Wins Journal, where as the following list of posts illustrate, the Knicks are a frequent focus.

Larry Brown or Isiah Thomas?

Pinning Your Hopes on Eddy Curry?

Isiah Thomas Discovers Role Players

The Knicks and Team Chemistry

Addition by Subtraction

Another Knicks Story

Eddy Curry is a Star?

Do All Injuries Hurt?

The Curry Scoring Illusion

Time to Play Balkman and the Genius of Isiah

In the Yale Economic Review I noted that scoring is over-valued in the NBA. Whether we look at free agents salaries or the coaches voting for the All-Rookie team, we see that scoring is the one factor that dominates player evaluation. Consequently scorers are expensive and teams have to limit their employment of such players.

Isiah Thomas – the Knicks general manager and coach – is blessed with a very large payroll. Consequently he did not have to limit his employment of scorers. For the 2005-06 season the Knicks had an abundance of expensive scorers – Stephon Marbury, Eddy Curry, Maurice Taylor, Jalen Rose, Jamal Crawford, and Quentin Richardson – and a Hall of Fame coach in Larry Brown. But these scorers were not able to produce very many wins, and the coaching of Brown could not change that fact. In the end, this team of scorers failed miserably.

In the past two drafts the Knicks have added David Lee and Renaldo Balkman, two non-scorers who can produce wins. So it’s possible that Isiah has learned a lesson, although his talk of “team chemistry” suggests otherwise.

If Isiah has learned nothing from past experience, taking away his salary cap woes will solve nothing. Isiah will simply take his new money and purchase another collection of scorers. On the other hand, if some learning has taken place, Isiah could quickly build a winner in the Big Apple.

Of course, we again come back to the point made earlier. It’s not clear that non-Knicks fans should care to see the Knicks win. And given that Stern represents all 30 franchises, he may have a tough time explaining why the rules should be suspended for Isiah Thomas and the Knicks.

- DJ

A WoW Anniversary

Last month was the anniversary of The Wages of Wins Journal. This month we mark another anniversary, the anniversary of our first book being published. I thought I would note this occasion by reviewing the story behind both the book and the title.

The Wages of Wins Story

Three years ago Marty, Stacey, and I were just three guys who had published a number of papers examining various issues that fall under the umbrella of sports economics. In the summer of 2004, Martha Cooley of Stanford University Press approached us about writing a book.

I believe all three of us had the experience of reading a book in the past. And I am pretty sure we all owned a book or two. None of us, though, had ever written a book. So with no experience, we said “what the hell.” (okay, we didn’t really say that, but I am sure we must have thought something along these lines).

After submitting a proposal in the fall of 2004 (which was subject to blind peer review), we signed a contract in December of 2004. Within a few weeks an assistant to Martha asked me if we could have the book finished in February of 2005. My reply noted that no one had started writing, and although our lack of book writing experience prevented us from knowing this for sure, we were fairly certain that we could not write an entire book in two or three weeks. After a bit of discussion we agreed to deliver a manuscript in September of 2005.

The summer of 2005 was fairly intense, but by September we indeed had a completed manuscript. This manuscript was also subject to review (and numerous edits – you cannot believe how many times I have read this book) before a final manuscript was completed in February of 2006.

In May of 2006 this completed manuscript was finally sent back to us as a finished book (complete with a cover and everything). So as noted, this month marks the first anniversary of The Wages of Wins being published.

The Title Story

The original title of The Wages of Wins was “Games with Numbers” (the title of Chapter One). This was our working title until August of 2005, when Martha told us that we needed a new title. Alan Schwarz – the one who described our book as “Freakonomics Meets ESPN” — had written a book in 2004 entitled The Numbers Game (an excellent book which we cited more than once). Martha thought our titles were too similar, so we had to pick something else.

We considered a large assortment of possible titles, but nothing seemed to make everyone happy. One night I was driving to California State University – Bakersfield (where I teach) and I started thinking about the main story we were telling. As readers know, the main story is that payroll and wins in basketball, baseball, and football do not have a strong correlation. We introduce this point in Chapter One, offer more discussion in Chapter Three, and return to this subject in Chapters Nine and Ten.

Given the importance of payroll and wins to our tale, I began playing around with these words in my mind. Somehow I went from payroll and wins, to wages and wins, to The Wages of Wins. This combination sounded interesting, so I sent it around to people for feedback. After some discussions we agreed this title was a good choice.

Of course there was only one problem: I had no idea what the title meant. The Wages of Wins? What the hell (said “hell” twice in one post, how edgy of me) is that supposed to mean?

Nevertheless, I added a paragraph into Chapter Ten where I detail what I think the title means. Basically if you create wins in the NBA by scoring, your wages are quite high. But if your wins are created by non-scoring factors, your wages tend to be lower. So “The Wages of Wins” depends on how you create the wins.

The Impact of The Wages of Wins

Like Freakonomics – another title with an unclear meaning – The Wages of Wins title served its purpose. It made our book a bit more distinct, which I guess is a good thing. Certainly the book has received far more attention than three economists writing a book for a university press could have expected.

Much has of course happened in the year since this book has been released. A year ago I was an Associate Professor of Economics at California State University – Bakersfield. Today I am an Associate Professor of Economics at California State University – Bakersfield. See, much has changed.

Okay, my job is still the same (and this is true for Marty and Stacey as well). But the book has allowed us to talk with a whole bunch of people, including a few “famous” folks like Malcolm Gladwell, Alan Schwarz, and Allen Barra. Although some of the people who have read our book (or not read it, but just heard about it) are unhappy with us (mostly Iverson fans), it appears the reception of our book was largely positive. And this is about all you can hope for with your first book.

By the way, for those who are wondering…there is a plan to write another book. Assuming we start writing soon, it should be available sometime in 2008.

- DJ

The Value of Winning the Lottery in the NBA

Yesterday Darren Rovell – of CNBC — offered some analysis of the economic value of Portland winning the NBA’s Draft Lottery. Stephen Dubner – of Freakonomics – looked at Rovell’s analysis and stated: ‘I don’t know what the Wages of Wins boys would make of Rovell’s analysis, but it’s well worth a look.”

Given this assignment, I spent yesterday thinking about the economic value of the number one pick. Here is what I came up with.

Analyzing Gate Revenue

The value of the first pick can be separated into two effects – the anticipated and actual impact:

1. With the first pick fans might anticipate a significant leap in the standings. Consequently, there might be value in just having the number one pick, as season ticket sales might increase the summer before the season begins.

2. Fans will also respond to any actual increase in wins.

To get at these two effects, I turned to the gate revenue model we discussed in Chapter Five of The Wages of Wins. This model links regular season gate revenue – weighted average ticket price multiplied by attendance – to a variety of factors that might impact a team’s fortunes at the gate. This list of factors includes wins this season, wins last season, star power, market size, stadium capacity, etc… To this list of factors I added a dummy variable for having the number one pick in the draft.

The model was estimated with data from 1992-93 to 2003-04 (and no, I was not going to update the data set in one day). The results indicated that just having the number one pick was worth, on average, about $2.5 million in 2003-04. This translates into about $2.7 million in 2007.

It’s important to note that this value seems all about anticipation. There does not appear to be any link between gate revenue and having the number one draft pick two years ago (so Toronto cannot expect additional revenue in 2007-08 from having the number one pick in 2006). I would also add, that what I found for the number one pick this year is not seen when we look at the team that picks second. Second choices do not seem to increase gate revenue.

This story is quite similar to the tale we told about “star power” in the NBA. As we noted in The Wages of Wins (and I noted in The New York Times last February) “star power” – by itself — does not seem to have much value for the team employing the star. At this point, Blazer fans anticipate more wins with either Greg Oden or Kevin Durant (the two players Portland is considering). If those wins do not happen, though, Oden and Durant – even if people believe they are “stars” — will probably not continue to attract many fans in Portland.

But of course, if those wins do happen, then Portland can anticipate even more fans to come see this team play. Is it likely that Oden or Durant will generate wins next year? I could forecast each player’s performance next year, but my model connecting college performance to the NBA is not finished yet (should be done in the next few weeks). Although I cannot forecast Oden or Durant’s production right now, we can look at what past number ones did their rookie campaign.

Table One: Performance of Number One Picks – 1992 to 2007

As the above table illustrates, the average number one choice since 1992 (covering 15 seasons) produced 7.6 wins and offered 0.129 wins per 48 minutes (WP48). So on average, these players were above average (since an average player offers a WP48 of 0.100). But there was quite a bit of variation. At one extreme you have Shaquille O’Neal and Tim Duncan, two players who produced more than 20 wins each their rookie season. At the other extreme are Andrea Bargnani and Kwame Brown, two players in the negative range. Over these fifteen seasons, only five times was the best rookie – in terms of Wins Produced – also the first player chosen overall. And as the following table highlights, five times the best rookie was not chosen with one of the first five picks in the NBA draft.

Table Two: The Top Rookies – 1992 to 2007

Given all that, it doesn’t look like having the first pick guarantees that a team will acquire a productive player. Still we have reason to think that Oden and Durant are each likely to be very good (I don’t need a model to make that statement). In other words, Portland thinks they are getting something closer to Shaq or Duncan (as opposed to Bargnani or Brown).

Let’s say that Portland truly has hit the jackpot and Oden/Durant actually produced20 wins in 2007-08. The aforementioned gate revenue model indicates that each win is worth on average about $270,000. So twenty wins is worth about $5.4 million in additional gate revenue.

If we put together the value of just having the first choice with the actual wins Oden/Durant might produce, we see that this choice might be worth $8.14 million in gate revenue alone. Such a figure is not too different from what Rovell suggested (and if Oden/Durant produced 13.36 wins next season our numbers would be identical), although our methods were not exactly the same.

Rovell noted that Oden/Durant would command $4,662,000 in salary next year. So using my numbers, the net is “only” about $3.5 million. Is this enough money to motivate teams to try and improve their lottery position (by not trying to win games)?

Moving Beyond Gate Revenue

Actually there is quite a bit more to the lottery story then a simple analysis of gate revenue in a player’s rookie campaign. Consider the case of LeBron James. A few days ago (and again in the above table) I noted that LeBron did not get off to a great start in the NBA. But over the past three seasons LeBron has been very good, producing 59.5 wins or about twenty per season. For these wins the Cavaliers paid $14.77 million, or about $250,000 per victory.

Last summer LeBron signed a contract extension with Cleveland that will come closer to paying him his market value. This contract begins in 2007-08 and is scheduled to pay LeBron $41.3 million over the next three seasons. And if LeBron does not become more productive (given that he is already producing close to twenty wins each year, it seems unlikely he is going to become that much more productive) the Cavs are now going to be paying close to $700,000 per victory. Or, over the next three seasons the Cavs will pay $26 million more for the same level of production.

The LeBron story highlights the true value of the number one pick. Although we saw that in some years the top rookie is not much of a prize, in some years you can land a player like Duncan or LeBron. And when that happens, a team can suddenly employ a top NBA player at a fraction of the cost.

And saving money is not the only motivation teams have to try and work the lottery. As I noted last summer in discussing Gilbert Arenas and the Washington Wizards, if a team is going to be among the very best it needs its top player to also be among the very best in the NBA. In 2005-06, Arenas was the Wizards best player with a WP48 of 0.157. If all your players on your team offered a WP48 of about 0.150, your team would win about 60 games. But it’s extremely unlikely that you could have an entire team that is just as good as your best player. In other words, for a team to reach 60 wins it’s going to need one or more players to offer a WP48 far in excess of 0.150.

Often, although not always (for example, see Kevin Garnett and the Minnesota Timberwolves), lottery teams do not have one major talent that is a necessary (although not sufficient – again see Minnesota) condition for title contention. So another benefit of the top pick is that a team can acquire that one talent it needs to at least dream about contending for a title.

When you consider the cost savings of the top pick, coupled with the chance to build a title contender, it becomes easy to see why Beck Taylor and Justin Trogdon uncovered evidence that NBA teams do indeed try to win less in an effort to secure a better draft choice. The payoffs for teams that win the NBA’s lottery are indeed similar to winning a lottery.

- DJ

Stephen Dubner Gives an Assignment

Darren Rovell has asked the question “Is the First Pick a Money Maker?”  In commenting on Rovell’s analysis at the Freakonomics blog, Stephen Dubner stated: “I don’t know what the Wages of Wins boys would make of Rovell’s analysis, but it’s well worth a look.”

So Dubner has given us (which I think will be me) an assignment.  This assignment allows me to comment on Rovell’s insights, which the readers of The Wages of Wins would know are amazing (after all, on the cover of WoW are Rovell’s words:  “Buy this book if you never want to lose an office water cooler debate again”). Also readers of WoW know how much we like Freakonomics.  So clearly, this is a great assignment.

Unfortunately, this is going to take a bit of time.  And by time I mean, I think I can have some kind of an answer by tomorrow. 

In the meantime, take a look at the latest brilliant column from Stephen Walters: The Gluttons’ Pavilion at Dodger Stadium.  Not sure what it is about the name Stephen, but our sample from Dubner and Walters suggests that this particular name seems to endow a person with unusually high levels of writing talent. Walters is clearly the best writing talent to grace this forum (and I am not saying that just because he works for free).

- DJ

The Gluttons’ Pavilion at Dodger Stadium

It’s amazing how often bad ideas become fads in American business. Luckily, in capitalism there’s a Darwinian process at work. Adopters of truly stupid ideas tend to go bankrupt—or at least wake up, smell the red ink, and get better advice. Eventually.

Which brings us to Your Los Angeles Dodgers.

No, I’m not going to bring up personnel decisions like paying the execrable Juan Pierre $44 million to not get on base for the next five years. That would be shooting fish in a barrel. I refer, instead, to the Dodgers’ embrace of the latest marketing fad: “all you can eat.”

Marketing gurus are waving this one-price-for-unlimited-quantity strategy like a magic wand, promising that it will unlock profits in everything from music downloads to long distance phone service. But the Dodgers mean it literally. According to a May 16 article in the Wall Street Journal titled “Free Eats Sell Bad Ballpark Seats,” the facts are these:

- Seats in the club’s right-field pavilion, which holds 3,000, sold for $6 to $8 last season and were mostly empty;

- This year, however, tix go for $20 to $40 (depending on the quality of the opponent and whether there’s a group discount or not);

- The higher price gets you UNLIMITED amounts of hot dogs, peanuts, popcorn, nachos, and soda (though beer, candy, and ice cream are still “a la carte”);

- Business is boffo in the Gluttons’ Pavilion (well, it’s actually called the “AM/PM All-You-Can-Eat Pavilion,” after its corporate sponsor, but that seems like a mouthful to me), with 8 of 18 dates sold out as of mid-May.

Predictably, the Dodgers have been denounced by pundits who accuse them of contributing to America’s obesity epidemic, and defended by the marketing types for banking more profits by ingeniously luring fannies to otherwise-empty seats.

As a mere economist, I’m prohibited from making sweeping moral pronouncements (especially about consuming nachos—mmm, nachos). But I’m pretty sure the anti-gluttony pundits have the better of this argument. What’s more, I suspect the gurus who think this is a moneymaker are wrong.

First, the gluttony problem. The thing is, “all you can eat” is not just bad if you’re obese; it’s bad on general principles, and the reason has to do with the function of prices and the concept of economic efficiency.

“All you can eat” just means you pay nothing for extra hot dogs or nachos—free eats! This is why marketing gurus think it’s magic. People love free stuff; the prospect has a magnetic attraction.

But, obviously, it costs resources to produce food. It’s not free, but rather sold at a zero price, which must be below cost. Under “a la carte” pricing, you have more wholesome incentives: weigh the value of your next wiener against its price or cost. If you buy it, economists applaud because we know you valued it more than it cost to produce; that’s efficient.

Under “all you can eat,” we can’t say that. Since the price of one more dog is zero, you’ll grab it even if the benefit to you is trivially small—and far below its cost of production. That’s a nice definition of gluttony, and it’s inefficient. Or, in plain English, wasteful and bad.

Might it be profitable? Time will tell. But there’s reason to be suspicious. What could be happening here is what economists who specialize in pricing strategy call “defection.”

Sure, the right field seats are full more often—but notice that overall Dodger Stadium attendance this year is DOWN from last season. As this is written, the Blue have played to an average of 44,972 fans per game, vs. 46,400 last year.

There are many possible reasons for this, of course (e.g., a grass-roots protest against the indignity of watching Juan Pierre try to hit?). But maybe part of the story is that some of the fans who used to buy good seats are now hanging out in the Gluttons’ Pavilion. Those eight sellouts, in other words, might not be a result of attracting new fans, but merely relocating some from the better seats.

Why relocate? Because of the signal being sent by this price structure. As everyone knows, ballpark food is priced at levels that should attract a Congressional investigation and, ideally, jail time for the perps. It’s every prof’s favorite example of monopoly pricing: once you’re in, you’re stuck.

What the Dodgers have done is give some of their fans—the ones who value cheaper food more than a better view—an out. Stay in the grandstand and pay an extortionate tab for dinner, or sit in right field and sacrifice sightlines for zero-price calories.

The whole thing might actually be costing the Dodgers money. True, prices in Glutton’s Pavilion have been set high enough to cover the team’s costs of all the food consumed. But one wonders if the “defectors” doing all the consuming out there might actually have spent more, all together, up in the grandstand at the mercy of those monopoly prices.

The Dodgers had better hope not. After all, they’ll need a lot of cash to dig themselves out of the hole they dug when they decided to sign Pierre.

–Steve Walters

Editor’s Note: For those who don’t remember, Steve is not just a brilliant writer but also a Professor of Economics at Loyola College.

Talking Boston and Memphis Fans Off the Ledge

Last night was the NBA’s annual celebration of the league’s biggest losers – the Draft Lottery. Given that this draft offers two major talents — Greg Oden and Kevin Durant — the “winners” last night were Henry Abbott’s Portland Trail Blazers (one definitely should read Abbott’s discussion of last night) and the Seattle Super Sonics. At this point we expect Oden to be in Portland and Seattle to take Durant (or maybe the other way around).

The conventional wisdom was that anyone picking third would be unhappy. That doesn’t seem to be entirely true since 1) there is more to this draft than Oden and Durant and 2) if Atlanta did not get one of the top three spots it would have surrendered its pick to Phoenix. So it’s a safe bet that Atlanta is thrilled to pick third. And I am sure they are also thrilled to be picking eleventh as well.

As for the fourth and fifth slots, we might have a pair of unhappy campers. Memphis and Boston entered the evening with the best shot of landing Oden or Durant. And there was some evidence, especially with respect to Boston, that a substantial effort was made to improve the odds of landing Oden and Durant. Nevertheless, the lottery gods (and/or David Stern — not to create conspiracy theories, but is it possible that Stern made sure Boston was not rewarded for their less than stellar efforts down the stretch?) did not smile down on these franchises. In essence, all that losing was for nothing.

Rookies are Generally Bad

Having read a bit of Bill Simmons lately, my sense is that right now he needs to be talked down off the ledge. Certainly it’s the case that all that losing didn’t lead to the promised reward. Still, fans of the Celtics (i.e. Bill Simmons) and the Grizzlies shouldn’t be too unhappy (and fans of Portland and Seattle should not be planning any championship parades just yet). Although Oden and Durant might someday develop into top players, there is reason to suspect that it may take some time. To see this, consider the average Wins Produced per 48 minutes [WP48] for each level of experience from 1993-94 to 2006-07.

Average WP48 by Year of Experience

As the above table indicates, the average first-year player has a WP48 of 0.047. Second-year players offer 0.076. It’s not until a player’s third year that the mean performance approaches the NBA average of 0.100. Now the results should not be thought of as a sophisticated analysis of peak performance in the NBA. All I am offering is simple averages which suggest that rookies tend to struggle in the NBA.

Of course one problem with the simple averages is that I am lumping together players who are “bad” – and consequently only play a short time in the NBA – with those who develop and have long careers. So perhaps I am overstating how bad rookies generally play.

How the NBA’s Best Performed as Rookies

So let’s take a different approach. Consider the top 30 players in the NBA in 2006-07.

The NBA’s Most Productive Players in 2006-07

As one can see, the reign of Kevin Garnett has ended. After four consecutive years, KG has now slipped to second. The new MPP (Most Productive Player) is Jason Kidd, who last took the top spot in 1998-99. Although this is not the promised comment on the MVP, one can see that Dirk Nowitzki finished 8^th while Steve Nash was ranked 6^th.

One could go on and on about each player on this list (for example, one could note that these 30 players produced 37.5% of all wins in the NBA this past season), but I would like to focus on the right-hand side of the table. There it is reported what each of these players – again, these are the top 30 players in the NBA in 2006-07 – did their rookie season.

All of these players produced at least eleven wins last season. But only five managed to hit the eleven win mark their rookie season. In fact,30% of today’s top performers were below average as freshmen in the NBA. This tells us that many of today’s best didn’t start out on top. And from the other side of the coin, even if a team’s draft pick stumbles out of the gate, it’s possible for a player to develop later on. Examples of players who developed after initially performing poorly include the aforementioned Nash and Nowitzski, as well as Chauncey Billups, Chris Bosh, and even LeBron James. The experience of James and Bosh suggest that it’s possible for Oden and Durant to struggle as rookies. This is something Portland and Seattle fans should consider.

There is also good news in this table for fans of Boston and Memphis. Two-thirds of these players were not taken with one of the top three choices in the draft. So although Tim Duncan, Dwight Howard, Elton Brand, and LeBron James – all former number one choices – have indeed developed into top performers; teams have also received high levels of productivity from players like Carlos Boozer, Ben Wallace, Manu Ginobili, and Gilbert Arenas. Each of these players were taken in the second round, or in the case of Wallace, not drafted at all.

The Lessons Learned

So how happy should fans of Portland and Seattle be today? And how unhappy should fans of Memphis and Boston be? The crude analysis offered here suggests that rookies tend not to be saviors. Yes, they can develop into top players, but it tends to take time. So Portland and Seattle fans are going to need to be patient.

As for fans in Memphis and Boston, the analysis suggests you don’t need the number one pick to get a top talent. Of course, although it’s true that even second round picks can develop into top NBA performers, most draft picks do not end up ranking among the NBA’s best (obviously). In sum, although it’s possible that Memphis and Boston can still find that talent that will turn their teams around, the odds are probably stacked against that happening.

Hmmm… so I am saying that it’s still possible that Boston could pick a great player, but this is not too likely. Clearly we don’t want me out there talking people off the ledge.

- DJ

Some Nice Things I’ve Missed – NBA Playoff Edition

This column is over 2,000 words. So let me apologize up front for wasting your time today with way too many words. If you do manage to get to the end of this post, you will see the following:

- a list of the NBA’s Best Teams in 2006-07

- a discussion of my efforts to predict the playoffs for True Hoops

- a review – built upon the work of Stephen Dubner – of The Black Swan by Nassim Nocholas Taleb.

- an possible explanation for why Chicago failed to defeat Detroit in the playoffs

- a link to my latest column for The New York Times

- and a quick poll

Again sorry for the length, but I got a bit carried away last night.

The NBA’s Best and Predicting the Playoffs

Continuing yesterday’s Sinatra inspired theme, I continue looking at “some nice things I’ve missed” by turning my attention to the NBA playoffs.

As I joked last month, the Iverson forecast was the first time an economist ever had a prediction come true (not a very funny joke, but a joke nonetheless). Henry Abbott of True Hoop has decided to put my power to predict to a test. Specifically, Abbott has asked a collection of “stat geeks” to forecast the playoffs in the NBA.

Before I get to the problems with this test, let me reveal my “brilliant” strategy. The following table reveals all the data I considered.

Table One: The NBA’s Best Teams in 2006-07

Yes, all I considered was each team’s efficiency differential. And the further apart the teams, the shorter I expected the series to be. Consequently, I took Chicago over Miami (more on this series in a bit). I also took Chicago over Detroit and Dallas over Golden State. The problem with this strategy is that it ignored the fact New Jersey had a healthier Richard Jefferson to combat the Toronto Raptors. In other words, the health of the players at the time the playoffs started was not considered. Given my time constraint, though, my simple strategy was the best I could do.

So far my strategy has not done too badly. Heading into the conference finals I am three points off the lead. Unfortunately, it seems very unlikely that I will win the coveted blazer Henry Abbott is bestowing on the winner.

The two leaders are Jason Kubatko of Basketball-Reference.com and Kevin Pelton. Everyone picked the Spurs and Pistons to win in the conference finals. Pelton and I do differ, though, on how long we guessed the series would last. So if the Spurs win in five and the Pistons win in seven, I will pass Pelton. Kubatko, though, will still be three points ahead because we picked each series to last the same number of games. My only hope is to differ from Kubatko in picking the Finals. And I think, as I will explain in a moment, that this would require that I pick against my “brilliant” strategy.

Why do I have to pick against my strategy? The closeness in the standings reveals one of the difficulties with this contest. It turns out that the “stat geeks” tend to see teams the same way. In other words, we tend to agree that teams are best evaluated in terms of offensive and defensive efficiency. Consequently five out of six of the contestants picked Chicago over Miami. Four out of six took Chicago over Detroit. And as noted, all of us picked Detroit over Cleveland and the Spurs to defeat the Jazz. My sense is that Kubatko and I will reach the same conclusion about who should win in the Finals. So I will have to pick the statistical “underdog” if I am going to win this contest.

Beyond the issue of the stats people seeing teams the same way, this contest also has one other problem. Basically the playoffs suffer from the classic “small sample” problem. As the Dallas Mavericks discovered, the best team does not win every game and it’s possible for an inferior squad to win a best-of-seven series. Statistical analysis doesn’t work very well with small samples, so predicting the playoffs is not a very good test of what we do.

All that being said, it doesn’t mean the contest isn’t a great deal of fun. It certainly has given me a rooting interest in every series, which makes the playoffs that much more enjoyable.

The Black Swan

The small sample nature of the playoffs doesn’t prevent people from trying to “explain” what we observe. For example, much has been written about various moves the Mavericks should make after the Warriors eliminated the team with the best regular season record (although not the best efficiency differential) in the first round. Or what the Bulls or Suns should do to get past the second round of the playoffs. Such explanations remind me very much of the arguments advanced by Nassim Nocholas Taleb.

One of the perks of writing a book is that publishers now send me advanced copies of other people’s books to review. Consequently, I was given an advanced copy of The Black Swan, Taleb’s latest book published by Random House. Taleb’s first book was entitled “Fooled by Randomness.” This first book, which was excellent, detailed the problem people have forecasting on the stock market. The Black Swan is basically a sequel to Fooled by Randomness. Although I could offer a detailed review, Stephen Dubner – of Freakonomics fame – saved me the trouble by writing a review that captured my basic sentiments.

… you will probably enjoy the writing of Nassim Nicholas Taleb, a polymathic gentleman whose new book is called The Black Swan: The Impact of the Highly Improbable. Here’s how its dust jacket succinctly describes the thesis: “A black swan is a highly improbable event with three principal characteristics: It is unpredictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was. The astonishing success of Google was a black swan; so was 9/11.”

I am about a third of the way through The Black Swan, and am finding it to be one of the most fun and challenging books I’ve read in a long time. It barrels its way through history, psychology, philosophy, statistics, etc. You find yourself arguing Taleb every third sentence or so — but, to me, that is part of the great fun. He is a brash, stubborn, entertaining, opinionated, curious, cajoling writer and thinker. I also very much liked his previous book, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets. The two books have similar worldviews but it is worth reading both of them. (FWIW, based on what he’s written, I think he would probably hate Freakonomics, and he explicitly hates the financial end of economics.)

I’m sure that some of you have already read The Black Swan, since it is a New York Times best-seller. If not, you can learn quite a bit about Taleb from his home page, as well as from this very good profile that Malcolm Gladwell wrote a few years back.

Like Dubner, I am a third of the way through the Black Swan. I also had the same impression. This book is a poke in the eye to those who think the analysis of stats provides the answer to everything. And this book forces us to ask if our explanations of the past are simply “concoctions” that allows us to believe the future can be predicted with great accuracy.

Defying the Black Swan

Although I agree with Taleb that we tend to “concoct” explanations of the past, this doesn’t stop me from “concocting” here and there. For example, when we look at offensive and defensive efficiency we see that Chicago was a “better” team than Detroit this year. Yet the Pistons defeated the Bulls in six games. How can this be explained? Well, let me “concoct” an explanation.

In the first round the Bulls faced the Miami Heat. Chicago probably thought they were facing the defending champs. Unfortunately, Miami had a big incentive problem. As I noted two weeks ago, players do not get paid much for the playoffs. So the only purpose in playing is to win the games. But the Heat just won last year, and since championships won (like most everything else) are characterized by diminishing returns (the first one makes you happier than the second), the Heat were not as driven to win in 2006-07. Plus many of their players are old and/or hurt, and they knew given their status that winning this year was a long-shot. Given all that, the Heat may not have been trying that hard in the first round.

But the Bulls probably thought the Heat were giving it their best shot. And when the Bulls won so easily they might have thought the playoffs were going to be easy. Then the Bulls faced the Pistons. The Pistons are not old and hurt. They also have something to prove (can they win without Big Ben?). And in the first two games the Pistons showed the young Bulls how hard a team can play in the playoffs. By the time the Bulls got the message, Chicago was in too big a hole to recover.

All that being said, what I just said is probably just nonsense. Again, there is the whole Black Swan issue. People look at the outcomes in the playoffs and then jump to conclusions. For example, people have argued that San Antonio defeating Phoenix is “proof” (a word that should be removed from every sports writer’s vocabulary. There is very little that is “proved” in sports) that how Phoenix plays in the regular season can’t work in the playoffs. When we look at each team’s efficiency differential, though, we see that the Spurs were the better team in the regular season and thus should have been favored.

That doesn’t mean, as the Warriors demonstrated, that the Spurs were guaranteed a victory over the Suns. The efficiency story, though, does tell us that the Suns should have expected their season to end in mid-May.

Although upsets can happen, your best bet in the playoffs is to be the better team. So going forward the Suns simply have to keep trying to build the best team possible (and getting rid of Shawn Marion is not likely to be a step that is consistent with the objective of building the “best” team possible).

Writing for The New York Times

Okay, I have said in a span of over 1,000 words: “Playoffs defy prediction” and the “Playoffs are predictable.” One of those views has to be right.

Two weeks ago I wrote another column for The New York Times entitled “The Short Supply of Competitive Balance” that you may have missed. And this column seemed consistent with the “playoffs are somewhat predictable” sentiment.

As this column notes, the NBA championship has only been won by a handful of teams in the past few decades. And if either the Spurs or Pistons win again, the title will once again reside in a familiar place. In this column I utilize “The Short Supply of Tall People” argument detailed in The Wages of Wins to explain why the NBA lacks competitive balance. For those who do not have insider access to The New York Times, you can see the same argument in The Wages of Wins or in the following posts:

The Short Supply of Tall People

On Jordan and Rodman, Again

The Changing Fortunes of Jamal Magloire and Zach Randolph

Why Have a Draft?

Quick Poll

Okay, now that I am back there are a number of topics to write about. What would you like to me write about first? Here is a list of potential topics:

-Who is the MVP in the NBA (if Wins Produced is your criteria)?

-Who is the NBA’s best sixth man?

-Who was most improved in the NBA in 2006-07?

-How does experience in the NBA impact player performance?

Let me know in the comments which of these four topics you want to hear about first. My plan is to get to these four topics in the next week or so. By then we should be closing in on the Finals. During the Finals I will repeat what I did last year. Specifically I will demonstrate again that I really don’t get the Black Swan argument by offering analysis of each and every game. Hopefully this analysis will be chocked full of “concoctions.”

- DJ

Some Nice Things I’ve Missed

Frank Sinatra demonstrated in the early 1970s that retirement was not among his many, many talents. After emphatically announcing his retirement in 1971, he released “Ol’ Blue Eyes is Back” (one of my favorite albums) in 1973. The next year came “Some Nice Things I’ve Missed” (another one of my favorite albums – okay, I have over 60 Sinatra albums and they are all among my favorites). The 1974 release includes such great songs as “I’m Gonna Make It All the Way”, “Satisfy Me One More Time”, and “What Are You Doing the Rest of Your Life?”

What does all this have to do with today’s post? Like Chapter Eight of The Wages of Wins — which also begins with an obscure Sinatra reference — not much. I did borrow the title of this post from the 1974 Sinatra album. And I did this because a few weeks ago I had to stop regular posting. In essence, I went into a mini-retirement. Like Sinatra, the retirement didn’t take. While I was gone, though, there were “Some Nice Things I Missed.” Today I thought I would go over a couple of these.

Michael Lewis cites The Wages of Wins

One of the writers that clearly inspired The Wages of Wins was Michael Lewis. Lewis wrote Moneyball, the classic book about inefficient decision-making in baseball. In April he penned an article entitled “The Jock Exchange” for Portfolio.com. This article examines the idea of publicly trading stock in athletes. It’s a fascinating story, with the following paragraph the clear highlight:

“In sports other than baseball, games are far messier, from a statistics viewpoint at least, and the problem of valuing players even bigger. Fifteen years ago, the left tackle was the lowest-paid player on the football field; now he is the second highest, after the quarterback. Why? Did the game change that much, or are teams just following a fad? Basketball teams have always paid top dollar to the players who score the most, even though three professional economists, in their analysis of pro sports The Wages of Wins, argue that scoring average is the single most overvalued trait in a basketball player.”

Okay, this probably isn’t the most fascinating paragraph. But it’s the one that mentions The Wages of Wins, so for me that was my favorite part of the article.

Seriously, the Lewis article is an excellent read and once again highlights the problem with player evaluation in professional sports.

Kevin Roberts Imitates John Maynard Keynes

John Maynard Keynes (perhaps the most influential economist of the 20^th century) was once asked about his habit of adopting a position at one point in time only to reverse himself later on. In response to this critique Keynes famously replied: “When the facts change, I change my mind – what do you do, sir?”

In April, Kevin Roberts of CourierPost Online, did a wonderfully impersonation of Keynes.

Malcolm Gladwell’s review of our book focused on our analysis of Allen Iverson. As The Wages of Wins asserts, when we consider every aspect of Iverson’s game (scoring, steals, shooting efficiency, turnovers, etc…), Iverson is only as productive as an average NBA player. In other words, he is not one of the 50 most productive players in NBA history.

Needless to say, this viewpoint was not embraced by all basketball fans. One of the early critics of our take on Iverson was Roberts. Last July he wrote a column (which I can’t find on-line anymore) and exchanged a series of e-mails with The Wages of Wins authors (which I did find) where Roberts expressed some skepticism of our analysis of Allen Iverson.

The events of the past season offered further evidence that our analysis of Iverson was correct. Just to review… the 76ers were 5-10 with Iverson and 5-19 when Andre Miller took the floor in Iverson’s place. At that point I predicted the 76ers would finish 30-28, which indeed they did. Looking at Wins Produced, this outcome was not a surprise. Miller has historically been more productive than Iverson, so Philadelphia should have improved with this trade.

Although Roberts did not agree with our assessment of Iverson last summer, 58 games with Miller leading the team led him to write: Miller the anti-Allen who gives team hope

As Roberts states:

The main reason the Sixers got respectable this season, and will be respectable next year, is Miller.

Although few dared to predict it, this was not entirely unexpected. David Berri, one of the authors of The Wages of Wins (a brilliant book that takes apart a number of conventional sports wisdoms and includes a method of evaluating NBA players that argued Iverson was a below-average player) called it exactly.

“I think the Sixers can be a .500 team the rest of the season,” Berri said in an e-mail exchange way back in January, and predicted the Sixers would then finish at 35-47.

The Sixers finished 35-47.

A full accounting of this can be found on Berri’s Wages of Wins Journal online, but of course this was not a guess. The reason for Berri’s prediction?

Andre Miller, who has been “consistently more productive than Iverson,” Berri said.

The column marks a sharp departure from the position Roberts took last summer. In other words, as the facts changed, Roberts changed his perspective. Just like Keynes.

The Lewis and Roberts articles were not the only things I missed. Tomorrow I will be back with a comment on predicting the NBA playoffs.

- DJ