Does Anyone Pay Attention to Sports Economists?

| by David Berri

Sometimes I am surprised at the answer to this question. To illustrate, a few years ago I was asked by Steve Forbes (okay, actually someone who works for Forbes) if I could send an autographed copy of The Wages of Wins to one of his friends. More specifically, a copy of The Wages of Wins was sent to me with an envelope and this request.  After complying with the request I never heard from Forbes, his representative, or his friend. And I am still surprised I ever heard from him in the first place.

A more recent example occurred this past week. Mark Mellman – like Steve Forbes – is involved in politics (although Mellman comes from the opposite end of the political spectrum). Recently Mellman wrote a column – at The Hill — detailing how the proposed changes to the leadership of the Democratic party would impact outcomes for the party. Mellman’s argument…

Well, let’s first review the sports economics story. Let’s start with a recent paper written by J.C. Bradbury. In “Hired to be Fired: The Publicity Value of Free Agents”, Bradbury looks at how a baseball’s players performance is impacted by a change in managers. 

Of the 134 managers in the sample, the estimates for 25 managers are statistically significant at the ten-percent level for hitters.  21 managers are associated with improvement and four managers are associated with a decline. For pitchers, the estimates for 24 managers are statistically significant at the ten-percent level. 15 managers are associated with player improvement and nine managers are associated with a performance decline. Five managers are associated with improvement and decline for both groups; however, in all cases, the managers are associated with the opposite effect for the two groups of players. Thus, no manager is associated with improving performance for both offense and defense.

In the conclusion, J.C. notes the following:

The results do not mean that managers play no role on baseball clubs. To the contrary, no team could operate without the aid of a manager. Organizing players, settling disputes, and controlling the media are managerial duties that must be handled, and have the potential to be handled poorly. The results of this study indicate that managers who have served at the major-league level do not differ greatly from one another in their ability to handle these important responsibilities in a way that improves or dampens player performance.

Readers of Stumbling on Wins would note that Bradbury’s results for baseball are quite similar to what we reported for the NBA. The study we review (which I co-authored with Mike Leeds, Eva Marikova Leeds, and Mike Mondello and published in the International Journal of Sport Finance) looked at 62 NBA coaches across thirty years of data. Across this sample, only 14 coaches were found to have a statistically significant and positive impact on player performance. So most NBA coaches – like most baseball managers — do not appear to make their players more productive.

Okay, two different studies in sports economics indicate that coaching doesn’t make much difference. But does this apply beyond sports?

The problem beyond sports is that we don’t have data on worker productivity.So it is hard to see if managers actually make workers better (or worse) in non-sports industries. Still, I suspect the impact of “leadership” is overstated (especially by leaders).

And Mellman appears to agree. His column discusses the desire some Democrats have to remove Nancy Pelosi (D-Calif.) from her leadership position in the house.  Mellman – via the arguments offered by J.C., my c0-authors, and I – disagrees.  Here is how the Mellman article concludes:

Fans are seduced by what psychologists call fundamental attribution error — the natural tendency to overweight the personal and underweight the situational in attributing causality. This psychological bias leads fans to believe the problem is the manager, just as experimental subjects believed a model train operator was unskilled when cars kept jumping the track, even after they were told the derailments resulted from a systemic cause — abrupt, random changes in the electrical current to the engine.

Changing managers (or leaders) may make some people feel better because they misunderstand the underlying dynamics, but it won’t cure the problems plaguing the Carolina Panthers, the Pittsburgh Pirates, the L.A. Clippers, the Wolverhampton Wanderers or House Democrats.

One should note that at the end of this article we learn that “Mellman is president of The Mellman Group and has worked for Democratic candidates and causes since 1982. Current clients include the majority leaders of both the House and Senate.” So Mellman’s analysis might be a bit biased. 

But one suspects – given what we have learned from sports – that the impact of changing leaders is overstated.  In other words, the problems Democrats had in this last election was more about the economy and less about Pelosi. And when the economy recovers, the opinions people offer about the leadership of Pelosi – and President Barack Obama – will change.

- DJ