Data continues to improve sports performance

Joy: As a Data Analytics teacher, I often think about the applications of machine intelligence to work processes. Samford undergraduate Copeland Petitfils has written the following blog, which is a reminder to me that there are still many potential areas for growth.

Since “Moneyball”, we have seen the growth of analytics throughout sports. However, many teams have stuck to the same old way of playing baseball, like the Braves. This past May, the Braves took a new innovative approach and saw room for growth on their defensive side.

The general manager, Alex Anthopoulos, implemented a radical strategy and improved the defense by using shifts with data analytics. While “Moneyball” looked at the statistics of acquiring cheaper players who had good batting averages and improved the offensive side, the Braves looked at improving the defensive side and the way they shift between pitches to improve their chances of getting a ground ball out. A defensive shift in baseball refers to the infield changing positions from normal to a certain area of the infield based on the pitches and using stat cast to predict where the batter is most likely to hit the ball depending on the type of pitches. Shifting can increase the probability for players to get ground balls out rather than hits.

Statistically, the Braves ranked at the bottom of defensive shifts in the MLB, and Anthopoulos, the general manager, saw this as an opportunity to improve. The Braves started the 2021 season with no shifting at all to shifting on 50.6% of pitches by the end of the year, which was the highest in baseball this year only behind the Dodgers. The shifting ultimately allows the Braves to improve in converting ground balls to out rather than turning into hits. At the start of the season, the Braves converted under 75% of ground balls into outs which ranked middle of the pack in defense. However, since implementing the shift the number jumped to 77%, which was the second-best in baseball. Although these jumps in percentages seem small, they allowed the Braves to field 25 more ground balls into outs rather than hits.

The data analytics the Braves used allowed the players to be put in a better position to succeed, and as the season progressed, they started to get better and better at it. These decisions turned around the Braves’ season, and now they are on their way to the World Series for the first time since 1999 after beating the Dodgers in the NL Championship.

Coda by Joy: That said, guess who failed at data driven decision making? Zillow!

In a statement Tuesday, Chief Executive Rich Barton said Zillow had failed to predict the pace of home-price appreciation accurately, marking an end to a venture the company once said could generate $20 billion a year. Instead, the company said it now plans to cut 25% of its workforce… “We’ve determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility,” Mr. Barton said.

Gen Z on The Great Resignation

Even though a housing price crash is often reported on as a crisis, it benefits first time homebuyers. Do the college seniors in 2021, likewise, see this “labor shortage” as a wonderful opportunity and stroke of luck for them personally? They overwhelmingly think of themselves as sellers of labor, not employers.*

Sometimes Samford students write for EWED if I felt like there was something that I and readers could learn from their perspective. This is accounting major Rachel Brinkley:

As a 21-year-old senior in college, the workforce is a confusing place. On the one hand, “The Great Resignation” is creating millions of jobs across America. It is a very encouraging time to be graduating college, as it appears that most of my peers and I will have no issues finding employment. Employers are currently struggling to compete in terms of compensation and benefits offered. I am majoring in accounting, and everyone that I have spoken to in my major has had at least one compensation increase since accepting their position. None of us have worked even one day on the job. This competition between employers creates favorable bargaining power for those entering the workforce, while putting a strain on employers.

While I may have confidence in my employment status after graduation, I will be starting at an entry level position for a firm that has a relatively structured promotional process. Like most large accounting firms, the promotions within the firm are based on the number of years spent working at the firm. There may be a few exceptions to the standard promotional pace, but I am not very optimistic about climbing the corporate ladder any faster than I would under more typical economic conditions. This is due, in part, to the fact that the best jobs are hard to come by. At a large accounting firm, the structured promotional process limits the number of the most sought-after jobs.

This circumstance leads me to ask how it is possible to obtain a top job when competition for those positions seems to be increasing. We read “Deep Work” for class, and I think about the author’s advice. We will need to continue learning new skills to make it into top positions.

Are my students running through the halls celebrating the current state of the labor market? Maybe they should be, but they are not, especially if their focus is on what Rachel called “top jobs”. Some jobs, almost by definition, are limited because they are top-of-the-pyramid or “tournament” positions.

My current Fall students pointed out that they feel better than the last two batches of students graduating into a closed-down Covid world. Many of our previous students got hired virtually and I don’t know at what point if at all they have had in-person interactions with work colleagues.

*The truth is more complex in a large diverse economy. Even though I don’t think of myself as en employer, I am concerned that there will be no one to operate my upcoming flight to a conference. The airline I rely on has had to cancel hundereds of flights in the past week over labor issues.

EWED Recommends Gifts 2021

Economists know that holiday gift-giving is inefficient. However, if it’s going to happen anyway then we try to help on the margin with our personal recommendations. First, I will explain the products that writers liked this year, and then I will list the books. I thank the writers for participating in this exercise for a second time (see last year).

Not-Books

Jeremy made strong case for portable batteries that allow you to charge your electronics. As he said, you could be someone’s battery hero! This product would make a nice tidy box to wrap for an adult and it’s under $40. Are men hard to shop for?

For stocking stuffers, Zachary recommends a children’s music CD by Laurie Berkner. Your kid will start asking for something on repeat, so why not make sure it’s something good? Zachary also reminds us to consider nostalgic wrapped snack foods.

Scott gives two solid options that are affordable and small. A keychain light for adults and a spinner toy for kids. You can buy the plastic spinners in bulk and give them out to a whole family or neighborhood of kids at the same time. A more substantial adult gift would be a folding bicycle.

I recommended a pair of running shoes and, even though this might no longer be the “hot” gift, AirPods. Some people still don’t have AirPods, and it makes a tidy package. Or, maybe your teen lost one of their ear pieces over the last year?

James reminds us to order products ahead of time because of looming supply chain delays. He also suggests some internet paid subscriptions. If you don’t want to deliver a physical wrapped package, then buying someone a year-long subscription to one of these Substacks is a great idea.

Note that the tungsten cubes you are seeing in the news are not EWED-endorsed gifts.

Books

Jeremy highlights a brand new economics book, Career and Family, about the changes in women’s labor force participation throughout the 20th century.

Yesterday, I recommended Liberty Power about American abolitionists for adults and The Voyage of the Dawn Treader for school-aged kids (in which, also, a slave trade is abolished).

Scott recommends How the Irish Saved Civilization. For many people, Scott’s book is probably a safer choice than mine because its scope is wider. Liberty Power would make a great gift for someone who reads so much that they have already finished How the Irish Saved Civilization.

James has given us a few suggestions. For fun, Murder-Bears, Moonshine, and Mayhem: Strange Stories from the Bible to Leave You Amused, Bemused, and (Hopefully) Informed. James found 4 Hour Body and 4 Hour Chef to be useful.

As a final note, a lot of my professor friends are getting the Remarkable II as a paper-reading-writing tablet. It seems superior to an iPad or previous tablets. Some functionality requires an extra data plan subscription.

Joy on Books 2021

The non-fiction book for adults I recommend this year is Liberty Power by historian Corey Brooks. If you have ever cared about social justice or affecting change, then wouldn’t you be curious to know how the abolitionists really did it around 1850? How, practically speaking, did a handful of people with moral convictions rid the United States of legal slavery? Abolitionists were striving and scheming to use the newly minted American democratic political system to their advantage even though they were in the minority. One of their big decisions was to start a third political party after they grew frustrated with slavery-complicit Northern Whig politicians. I blogged here about the connection with current politics.

I had a huge gap in my knowledge of American history before reading this book. Nothing that happened between George Washington and the Civil War seemed interesting, until this book created a narrative that I cared enough about to follow. History books might not be the perfect gift for everyone, but I bet no one in your family already has it!

Another book I reviewed earlier is Emily Oster’s The Family Firm, which any parent of young children would probably find helpful if they like research.

When I’m not reading for work, I read to my kids. I strongly recommend, for kids aged 6-12, The Voyage of the Dawn Treader. This ties into Liberty Power, because the main characters abolish the slave trade on one of the islands they sail to!

Before reading Dawn Treader, you should certainly start with the book that sets up the world, The Lion The Witch and the Wardrobe. I have a tip for younger kids: start reading this book right at the point where Lucy walks into the wardrobe for the first time. Younger kids won’t miss the first few pages that explain how the 4 children came to be in the old house.

For 4yo and 5yo kids, I recommend Aesop’s fables. These are short and self-contained. There are many versions of fable books for kids with good illustrations.

In addition of my specific plug for the Narnia series, I encourage parents to read fantasy with children. I see a lot of children’s books that promote science or STEM-readiness. My son enjoys learning about dinosaurs and nature, however I am certain that he’s learned the most from the conversations we have had about adventure stories.

Reading to your kids is costly in terms of time. We have limited time, so let me make an argument for dropping some of the other competing activities. I speak as someone who professionally teaches hundreds of college students to program. Those games that try to trick 5-year-olds into “programming” are less valuable than reading and discussing fantasy stories.

Inspire them with the story of a ship sailing to unknown islands. Talk about how a lovable band of flawed characters can escape from a clever magician. What your child will need to be able to do when they are 20 is read and comprehend a textbook that explains a totally new technology that no one alive today understands. Then they will need to think of creative ways to apply that technology to real world problems.

Joy Recommends Running Products

Late October is a nice time to get outside in Alabama. I have answered the primal call to suburban moms and signed up for a 5K running race at the end of the month. To make running practice safe and fun, I dropped a few hundred dollars this month on products.

Now that I’m old, my first concern is not injuring myself. Having good new shoes that absorbs some of the impact from running is important. I went to a local running store and ended up getting Asics Gel Nimbus.

I really like them. Amazon link. It seems like the price ($150) in the boutique store and the Asics website and Amazon is all the same.

Assuming you are not considering getting these shoes for yourself, do not buy a woman running shoes for Christmas, obviously, unless you’ve discussed it with her. You could buy a family member the other big purchase I made for running: AirPods.

Many people already have AirPods but I’ll review them anyway. I bet there are at least 10 people out there just like me who view them as newfangled and unnecessary.

My primary reason for getting them was so that I can listen to music while I run and not have the annoying headphones cord in my face. They are great for running. By the way, I got the cheapest version since I only use them occasionally.

AirPods are more than wireless headphones.  They are smart. They allow you to take hands free phone calls when your phone is two rooms away (which can be a reason to keep them in even when you are not listening to music). They respond to voice commands and prompt you on what to say. Maybe I shouldn’t be, but I was surprised by how easy it was to start using them.

I use a free application called RunKeeper. Without any fiddling from me, the AirPods give me useful feedback on my run from RunKeeper. I don’t have to stop the music or pull out my phone to get this feedback. It just knows, and the AI is correct about what I want to hear when.

While I was at the Apple store getting AirPods, I considered getting an Apple Watch. It turns out that the Apple Watch does not have a long range from the phone. So, I cannot run a mile away from my phone and still get all services on the Watch. Since I’m not a serious runner, I did not want to spend hundreds of dollars on a new watch plus pay for a separate cellular plan for the device. I run while holding my small-ish iPhone.

Apple Watch records your heart beat. I can be a privacy grump, even though I use a lot of tech. Apple Corp. can C it’s way right out of my vital signs. I don’t even want data on my heart rate and sleep patterns, for myself. I’m already mentally overloaded, so I don’t want more data to think about.

Here’s a song I like to put at the beginning of my running song playlist: https://www.youtube.com/watch?v=FxmkYugYu7Q

Lastly, for your holiday shopping list, I will make one plug for the shirts in our Blog Store. These make a fun gift for math majors or Econ Ph.D. folk.

Gen Z on TikTok

I did an informal survey among undergraduate students. This is not a representative sample of American youth. Before answering the question “How is TikTok affecting your peers?” they had just heard about the TikTok recommendation algorithm. Answers might have been slightly different if they had not been primed to think about the app from a business perspective.

Most of the answers were negative, both among students who use TikTok themselves and especially from students who are staying off of the app. Some answers presented both a positive and a negative reply.

Here is one of the more positive replies:

“TikTok is affecting my peers in a few different ways. On the positive side, people can learn very useful things on the app. On the negative side, it can be very time consuming. I have heard from many friends how they have wasted a lot of their time on TikTok when they could have been doing something more productive.”

Some students emphasized the social aspect:

“TikTok is one of the biggest social platforms amongst my friends and I. When we hangout, we are creating our own TikToks, but when we are apart we are able to share videos with each other. TikTok for me is a big rabbit hole that I find myself spending way too much time on.”

Also, they believe that this platform, more so than the original social networks, allow a new user to break out. “The idea that a normal, average person can post on TikTok and have a likelihood of it becoming viral is what has launched the platform.” I can see how a 20-year-old today would think Twitter is less fun because it is hard for a newcomer to get noticed.

Some students mentioned the addictive aspect of TikTok:

“I see a lot of my peers stay on the app for long periods of time. I can’t count the amount of times people say something about how they didn’t realize they were scrolling for an hour before they looked at the clock.”

“I have three friends back home who are being affected by Tik Tok in the worse way possible. All they do is watch Tik Toks all day and has even affected their sleep schedule cause they can’t put their phone down. It’s hard to see my friends sucked in the rabbit hole.”

“Personally, I have had to set screen time limits for TikTok through my phone’s settings because I can easily spend extended periods of time of the app without even realizing it; and even then, sometimes, I even override the limits I have set in place because I want to see even more content.”

The funniest line award goes to: “I personally hate TikTok and think it is rat poison.”

I wonder how the responses might have differed if I had asked a similar question to college students about TV and video games 20 years ago.

I use Twitter frequently. Maybe I spend more time on it than I should, and I don’t support as many paid media outlets as I might otherwise. Thus, the non-Twitter world is less rich for today’s college students.

For balance, here’s how Big Tech helped me in the past week. I needed to help my son build a model rocket from a kit. Some stranger kind young man had made an excellent YouTube video detailing how to make this rocket. This video really helped me, and the man should get the satisfaction of one more watch on his views count.

Reading Slavery and American Economic Development

Slavery is a bad and we should rid ourselves of it. One of the arguments made by abolitionists before the Civil War in the United States is that slaves make poor workers and therefore it’s not that costly to get rid of slavery. Of course, it doesn’t matter if slaves worked hard or not. Slavery was a moral abomination, regardless. However, it does make it easier to argue that we should direct government resources to fight enslavers when we can make a case that slavery makes the entire country poorer.

On the one hand, there were many non-slave workers and farmers in North America, demonstrating that products including cotton could be produced by free labor. On the other hand, slavery as an institution expanded into the South and the West, presumably because of the economic advantage it gave to slave-owners.

In Slavery and American Economic Development, economist Gavin Wright states that whether or not slaves were as productive as free/wage labor is hard to measure and also is not hugely important. Slavery might have provided wealth to slave owners in the South, but that is only because of the institutional setting that was created explicitly to maintain the slave society.

The American South had some of the best land in the world for growing cotton and cotton became a lucrative export crop thanks to British demand before the Civil War. Before the Civil War, there were some extremely profitable plantations on which slaves worked. It is true that some enslavers became rich and that drives up what appears to be the GDP per capita in the South at the time.

Wright explains that a slave owner living closer to the East Coast was better able to go on an entrepreneurial venture into Alabama to clear a large plantation for cotton farming than a typical free family farmer. The slave owner could obtain large loans and had a future guarantee of workers (thanks to the local laws and police state). So, something like a modern corporation employing free labor could also have accomplished the venture. But, at the time, it was an opportunity that was easier for enslavers to take advantage of. Free farmers also expanded West into the United States, but they tended to move more slowly and focus on subsistence (e.g. wheat for consumption). That is, partly, what Wright means when he speaks of slavery as a “system of property” as opposed to just a “system of production”. That helps explain why slavery was on the rise in the American South.

Wright also examines slavery as a political regime. In a place with many slaves, resources had to be allocated to policing and preventing revolts. It might have been individually rational for a landowner to offer freedom to slaves as a form of compensation for work, but this was disallowed by that broader political environment. So, everyone was somewhat trapped. Most importantly, the slaves were abused and trapped. But the free residents of the South had to live in a stagnant society. Governments did not invest in schooling, even for white children.

Municipalities in the North were booming and attracting free migrants with public investments. These investments set the North on a path to overtake the South economically and demonstrate which system is superior for creating wealth. Wright blames property owners in the South for continuing to fail to vote for good institutions that foster economic growth after the Civil War.

Calling Behavioral Economics a Fad

Josh Hendrickson and Brian Albrecht have a Substack called Economic Forces that is a source of economics news and examples. We have linked to EF before at EWED.

Albrecht just published an op-ed titled “Behavioral Economics Is Fine. Just Keep It Away from Our Kids”. I’ll to respond to this, just as I responded to that other blog. I think the group of people who are pitting themselves against “behavioral economics” is small. They might even think of themselves as a minority embattled against the mainstream. So, why bother responding? That’s what blogs are good for.

I agree with Albrecht’s main point. The first thing an undergraduate should learn in economics classes is the classic theory of supply and demand. Even in its simplest form, the idea that demand curves slope down and supply curves slope up is powerful and important.*

Albrecht points out that there are some results that have been published in the behavioral economics literature that turned out not to replicate or, in the recent case of Dan Ariely, might be fraudulent. Then he makes a jump from there by calling the behavioral field of inquiry a “fad”. That’s not accurate. (See Scott Alexander on Ariely and related complaints.)

In his op-ed, Albrecht names the asset bubble as a faddish behavioral idea. Vernon Smith (with Suchanek and Williams) published “Bubbles, Crashes and Endogenous Expectations in Experimental Spot Asset Markets” in Econometrica in 1988. Bubbles have been replicated all around the world many times.  There is no doubt in anyone’s mind that the “dot com” bubble had an element of speculation that became irrational at a certain point. This is not a niche topic or a very rare occurrence. Bubbles are observed in the lab and out in the naturally occurring economy.

Should we start undergrads on bubbles before explaining the normal function of capital markets? No. Lots of people think that stock markets generally work well, communicate reliable information, and should be allowed to function with minimal regulation.  Behavioral Finance is usually right where it should be in the college curriculum, which is to be offered as an upper-division elective class for finance and economics majors. I am not going to do research on this, but I looked up courses at Cornell, and there it is: Behavioral Economics is one of many advanced elective classes offered for economics students. I don’t know how they teach ECON101 at Cornell, but it would seem like they are binning most of the behavioral content into later optional courses.

In a social media exchange, Albrecht pointed me to one of the posts by Hendrickson on how they handle the situations where it seems like economic forces are not explaining everything. Currently, for example, it seems like the labor market is not clearing right now because firms want to hire but wages are not rising. The quantity supplied seems lower than the quantity demanded at the market wage. Hendrickson claims that this market condition is temporary. He says that firms are cleverly paying bonuses to attract workers so that they won’t have to lower wages in the future when conditions return to normal post-Covid. This would be a perfect time to discuss downward nominal wage rigidity, a pervasive behavioral phenomenon.** It has been studied extensively in lab settings. Nominal wage rigidity has implications for monetary policy. Wage rigidity might be a “temporary” thing, but it helps to explain unemployment. Some of the research done by behavioral economists in this area follow the Akerlof 1982 paper on the gift exchange model. It was published 40 years ago by a Nobel prize winner and cited extensively.*** The seminal lab study of that theory is Fehr et al. 1993. There have been hundreds of replications of the main result that people will trade out of equilibrium due to positive reciprocity.

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Forecasting that Job Growth Would Continue

The number of new jobs is being heralded (example in picture) as disappointing relative to the expectation that we would march steadily back to pre-Covid employment levels. (Ben Casselman is a good Twitter source for the data.)

One of the reasons for a slow recovery is that the Delta variant of Covid hit hard at the end of the summer and people are not getting vaccinated, so the health threat of going out to work and consume did not decline as much as we had expected. Covid was hard on family caregivers, often women. The disruptions to childcare from Covid still are not over. We are seeing a reversal of the massive influx of women into the formal workforce that started in the previous century.

Some people are saying that workers no longer want “dead end jobs,” and there has been a permanent shift in the labor supply, although it is hard to disentangle that from the effect of temporary Covid subsidies.

I am reminded of two very different sources who claimed, before 2019, that what we had in the early 21st century was not sustainable.

First, there were agitators for a $15/hr minimum wage. They marched in the streets while leading Democrats voiced approval. They were pointing out that families in America who depend on $8/hr jobs do not feel like they have a part of the American Dream.

Someone who, I am certain, would be against a federally mandated $15/hr minimum wage was also pointing this out. Tyler Cowen published Average is Over in 2013, when unemployment was still high following the Great Recession. Chapter 1 of Average is Over is called “Work and Wages”. Tyler was concerned that market forces were creating a world where some people have the best jobs that humanity has ever conceived of, by virtue of their compatibility with intelligent machines, while the rest of the workforce is left with jobs that are not so great. At the time, I don’t think people realized how many jobs could be done from the comfort of home or from a hip coffee shop. Covid exposed that. The “not so great” jobs feel especially crappy when you know that people in your city get paid 6 figures to sit at a laptop.

Tyler might have been surprised when unemployment dropped so low in 2019, right after he had written The Complacent Class, which warns us that America isn’t working well for a large group of people.

We are not great at predicting the future.* Some of Tyler’s predictions have come true already, but even he did not try to put a date on things. The point is that maybe the latest job numbers are not as surprising for the reason that the forecasts were more wrong than we thought. Covid has moved us far out of equilibrium, so it is still hard to tell where we are going to land.

Personally, I thought prices at the grocery store, one of the few places you could go in early 2020, would shoot up faster. It seemed to me like we would need to start paying cashiers more as hazard pay.

*In one of my experiments, I asked subjects in the role of employers to predict what their employees would do. They failed to predict how strongly employees would respond to wage cuts. We are not great at predicting.