I found two interesting studies for you sports fans:
1. Mark Perry links to a Drew Johnson post on the relationship between state income tax rates and NBA team performance. I linked to the Perry post because it has a nice graph. Teams in states with no income taxes (Florida, Texas, etc) tend to draw better athletes in the free agent market, and thus post better winning percentages. Is the relationship real? They negative correlation is significant at the 99% level. Most economists consider that to be highly significant; because of the problem of data mining and publication bias, I don’t. But if the same result holds 10 years from today, I’ll change my mind.
BTW, progressives like Yglesias often point out that no matter what they say, the GOP is devoted single-mindedly to one goal, and one goal only—lower tax rates for the rich. And I have to agree that that is an obsession of many GOP economists. But then why the strange pattern of state income taxes around the country? Income taxes are often higher in conservative Republican states in the South, than in liberal Massachusetts. Even more surprisingly, the rich in the South are especially likely to be Republicans (as compared to the rich in Boston, NY and LA.) Yes, there are some GOP states with no income tax (Texas, Tennessee and South Dakota.) But there are also swing states (Nevada, New Hampshire and Florida) and even one liberal state (Washington.) Why don’t the southern and Rocky Mountain GOP states at least cut the top rate down to Massachusetts levels (5.3%)?
Let’s see if this study causes (NBA fan) Matt Yglesias to call for abolition of state income taxes in the DC area.
2. A fascinating study by Christopher Parsons, Johan Sulaeman, Michael Yates and Daniel Hamermesh looked at 3,524,624 pitches and found that umpires in baseball discriminate in favor of pitchers of the same ethnicity. Even more fascinating is the fact that pitchers seem to know this (at least subconsciously—they might think the umpires of the same ethnicity like them for some other reason) and throw more pitchers where the umpire’s favoritism would help. Those include more breaking balls and pitches on the edges of the plate, as in both cases umpire discretion is more feasible.
And here’s the most interesting finding of all:
Roughly one third of ball parks we studied contained a system of computerized cameras (QuesTec) used to evaluate the umpires, comparing their ball/strike calls to a less subjective standard. Umpires have strong incentives to suppress any bias in such situations, as the QuesTec evaluations are important for their own career outcomes. With such explicit monitoring, evidence of any race or ethnicity preference vanishes entirely.
On a more serious note, this is a problem for minority pitchers, as 90% of umpires are white. It also suggests the performance evaluations can’t always be relied upon when looking for discrimination.
I’m no good at econometrics, so I’d be interested if a reader was able to ascertain whether their empirical results are also consistent with minority pitchers throwing slightly more balls, and minority umpires being much more biased than white umpires. You’d want to look at the QuesTec part of the study, but I had trouble interpreting those results with a quick skim. I’m not saying this alternative interpretation is particularly plausible, just that I’d like to nail this down. With 3.5 million pitches there ought to be a high level of statistical significance. That’s why interpretation is so important. Can we rely on this study? (I already know that we can’t rely on the AER, as they published a paper on stock prices and rainy days with no statistical significance.)