There are two methods we could use to evaluate the participants in the NBA Finals. We could look at how many games each team has won. Or we could consider each team’s efficiency differential (offensive efficiency minus defensive efficiency).
Table One: The NBA Finals and Efficiency Differential
Table One considers both perspectives. And it appears that efficiency differential is the best predictor.
If we look at the 34 NBA Finals that have taken place since 1974 (the first year we can calculate efficiency differential), we see that the eventual NBA champion had the better record 20 times. The team with the best efficiency differential, though, won the title 24 times. So it appears – from this simple test – that efficiency differential is the better indicator of team strength.
The Upsets
Although efficiency differential does indicate the winner more often than just won-loss records, it’s not perfect. Ten different times the NBA Champion had the lesser differential in the regular season. Here are those ten champions (with the difference in differentials – between the champ and its opponent — reported):
2006: Miami Heat (-2.53) over Dallas Mavericks
2001: LA Lakers (-1.02) over Philadelphia 76ers
1995: Houston Rockets (-4.91) over Orlando Magic
1994: Houston Rockets [-2.88] over New York Knicks
1989: Detroit Pistons (-1.05) over LA Lakers
1982: LA Lakers (-0.96) over Philadelphia 76ers
1979: Seattle Super Sonics (-1.97) over Washington Bullets
1978: Washington Bullets (-0.60) over Seattle Super Sonics
1975: Golden State Warriors (-3.53) over Washington Bullets
1974: Boston (-3.94) over Milwaukee Bucks
Since 1982 the weaker team – in terms of efficiency differential – has only won five times. In other words, across the last 25 years, efficiency differential has called the champion correctly 80% of the time.
One should note that three of these times, the weaker team (in terms of efficiency differential) – due to a better won-loss record – had home court advantage in the playoffs. So these upsets were not surprising.
In sum, over the past 25 years, truly surprising upsets – in terms of efficiency differential – have been rare.
Perhaps Not an Upset
Of course, upsets do happen. But when we understand efficiency differential we learn that what people think is an upset is not always what it appears to be.
For example, in 2004 the Detroit Pistons defeated the LA Lakers. The Lakers employed Shaq, Kobe Bryant, Karl Malone, and Gary Payton. And because the Lakers had the better won-loss record, LA had home-court advantage.
Despite this cast of legends, though, the Pistons took the title in five games. This was considered a surprise at the time, although efficiency differential indicated the Pistons should have been favored. Detroit had a differential of 6.41 in 2003-04. The Lakers – even with the “unstoppable” Kobe Bryant – only had a differential of 4.07.
And then there was the “supposed” upset I discussed last summer. In 1977 the Portland Trail Blazers – led by Bill Walton – took on the Philadelphia 76ers (led by Dr. J.). Again the Sixers were the heavy favorites. In terms of efficiency differential, though, the Blazers mark of 4.96 bested the Sixers mark of 3.5o. So despite the media’s arguments to the contrary, no one should have been surprised when the Blazers took the title in 1977.
Celtics vs. Lakers
If we listen to the many members of media, the Lakers are the favorites in 2008. In other words, if Boston wins it will be an upset.
Before we get to this year’s contest, let’s take another look at the past. When we think of Celtics vs. Lakers we often think of Larry Bird and Magic Johnson (unless we are much older and then we think of Bill Russell and Wilt Chamberlain). Three times Bird’s Celtics faced Magic’s Lakers in the NBA Finals. In 1984 the Celtics proved victorious. But in 1985 and 1987 the Lakers came out on top.
Here is the efficiency differential story of these match-ups:
1983-84: Boston Celtics (6.27) over the LA Lakers (3.52)
1984-85: LA Lakers (6.90) over the Boston Celtics (6.35)
1986-87: LA Lakers (8.85) over the Boston Celtics (6.50)
In each case the team with the better differential took the title.
And that brings us to the 2008 match-up. The Celtics in 2007-08 had a differential of 10.95 while the Lakers had a mark of 7.35. The difference of 3.60 has only been overcome by two teams (Houston in 1995 and Boston in 1974).
So the differential story indicates that the Celtics should be the clear favorites.
Of course, as I detailed earlier in the week, there are reasons to think the Lakers regular season differential understates the quality of this team. So maybe the Celtics are not clear favorites.
Although the Celtics may not be clear favorites, there doesn’t appear to be a tremendous amount of objective evidence that says the Lakers should be clear favorites, either. And yet many members of the media have anointed Kobe and company – a team without home court advantage – as the likely winner of this contest.
Certainly the Lakers could prove victorious. But again, I see very little objective and systematic evidence that would make anyone certain this was going to happen. And yes, I don’t think simply stating that Kobe is “unstoppable” constitutes objective evidence.
– DJ
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Our research on the NBA was summarized HERE.
The Technical Notes at wagesofwins.com provides substantially more information on the published research behind Wins Produced and Win Score
Wins Produced, Win Score, and PAWSmin are also discussed in the following posts:
Simple Models of Player Performance
What Wins Produced Says and What It Does Not Say
Introducing PAWSmin — and a Defense of Box Score Statistics
Finally, A Guide to Evaluating Models contains useful hints on how to interpret and evaluate statistical mo
Wages of Wins Journal 
ilikeflowers
June 4, 2008
I wonder how well using home and away efficiency would predict the historical results.
Todd
June 4, 2008
Wow. The 95 Rockets are the only team in the last 30+ years that has overcome as big a deficit in efficiency differential as the Lakers face.
Tball
June 4, 2008
Was the ’95 Rockets upset the year they came out of the West as a 6 seed and/or Hakeem only played a limited portion of the regular season?
Since it was mentioned in the last article, how frequently is conference playoff efficiency differential a successful predictor of the Finals victor?
ilikeflowers
June 4, 2008
Tball, that was the year that they acquired Clyde Drexler in a mid-season trade.
porteno
June 4, 2008
this is terribly anecdotal, but schmeh. a guy like Shaq frequently didn’t try his hardest til the playoffs. so it’s not terribly surprising that 2 teams with Shaq were the ones who overcome differential.
Madrugada Jones
June 5, 2008
This bit is interesting: “In other words, across the last 25 years, efficiency differential has called the champion correctly 80% of the time.” I wonder why this has held true only in the past 25 years? Was it the advent of the 3-point line in the 1979-80 NBA season perhaps? Not sure exactly how this would figure into the equation, or if it’s just a coincidence. And you can view my CARTOONS by clicking on my name link.
porteno
June 5, 2008
As of right now, Tradesports has the Celtics as only a 38% favorite. Clearly, there should be some equity for the Celts there if Dave is right.
merl
June 6, 2008
I think that you can take it even further than you have david.
In the last 25 years when one team has had the best differential AND the best record (as Boston does), then that team has won 15 time and lost 3 times, for an 83% winning record.
And of those three ‘upset’ losses, two of those teams had won the championship the previous year, so that is not very surprising.
Which makes Dallas losing to DWade and the Refs last year the sole anomaly in the last years (i.e. the NBA’s post-cocaine period).
merl
June 6, 2008
When there’s a discrepancy between efficiency differential and wins, efficiency has 4 championships vs wins 2.
I think you have to break it down that way if you are wanting to compare the two methods predictive power.
UTP
June 6, 2008
I am not a believer in records as most sports involve winning ON THE DAY…and that is what matters here as well. They are well-matched teams but the Playoffs are about Defense and Celtics have the EDGE there…they should how they could mess up Kobe in Game 1. More of that to come in the upcoming games also.