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Economists turn to cricket to base their theories

Economists turn to cricket to base their theories
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First Published: Wed, May 05 2010. 01 15 AM IST

Human capital: Sachin Tendulkar scores his first 50 in his debut series in Pakistan, in only his second Test match. Like Sunil Gavaskar, Tendulkar is an iconic example of a cricketer who was blooded,
Human capital: Sachin Tendulkar scores his first 50 in his debut series in Pakistan, in only his second Test match. Like Sunil Gavaskar, Tendulkar is an iconic example of a cricketer who was blooded,
Updated: Thu, May 06 2010. 10 28 AM IST
New Delhi: Over the last decade, as the West Indian cricket team went from weakness to weakness, Rodney Ramcharan watched with particularly befuddled exasperation. A Trinidad-born, American-trained economist at the International Monetary Fund, Ramcharan couldn’t understand why West Indian selectors treated their debutants the way they did.
“They didn’t seem to be considering that some guys were playing their first match at Perth”—where the surface is famously difficult—“and some at home”, Ramcharan says. “If you started off well, they gave you a couple of runs in the team, but if you started off against Australia and failed, that was the end.”
Human capital: Sachin Tendulkar scores his first 50 in his debut series in Pakistan, in only his second Test match. Like Sunil Gavaskar, Tendulkar is an iconic example of a cricketer who was blooded, rather than protected, in a tough debut series and still performed admirably. Photo: The Hindu
But only a little while ago did Ramcharan and a colleague, Shekhar Aiyar, read into the whims of cricket selectors a metaphor for the working world at large. Like the average debutant, few of us can control whether our first job is a comfortable or demanding experience—whether we play on a familiar wicket at home or a challenging one overseas. “We could establish a link between a player’s debut and his career,” Aiyar says, “and we could isolate the role that luck plays in careers.”
It is the sort of insight that begs to be written up into a paper, and Ramcharan and Aiyar duly obliged, joining a growing band of economists who have started looking to cricket to model their theories. A crude search through a database such as RePEc (Research Papers in Economics) shows a slew of cricket-related papers in late 2000s, but barely any in the 1980s and 1990s; papers on baseball and football, however, appear even from the 1970s.
Robert Macdonald, a senior fellow in the sports law programme at the University of Melbourne and a contributor to a popular blog called The Sports Economist, recently conducted a more refined search through three other databases: Google Scholar, EconLit (maintained by the American Economic Association) and the International Bibliography of Social Sciences (maintained by the London School of Economics).
In the three databases, Macdonald found a total of nine cricket-related papers from the period 1980-84, 14 from 1995-99, 54 from 2000-04, and 88 from 2005-09. The numbers are only indicative of broad trends, Macdonald cautions, but he agrees that cricket’s obsessive detailing of statistics makes it particularly useful to economists.
“Most sports provide a good opportunity for testing economics theories,” Macdonald says. “But cricket…is largely a game of individual performances, which could make it a more useful natural experiment than some other sports, where individual performances are vastly more dependent upon the contributions of teammates.”
The Ramcharan-Aiyar paper is an example of the unique benefits that cricket can provide an economist; indeed, it was only made possible because, Aiyar notes, “the home-field advantage is much greater in cricket than any other sport”. Titled What Can International Cricket Teach Us About the Role of Luck in Labor Markets, the paper scrutinizes the careers of 790 Test cricketers who debuted between 1950 and 1985.
Aiyar and Ramcharan first conclude what every cricket fan knows: that debutants at home do better than debutants abroad. More surprisingly, however, they then prove that a cricketer’s debut average can significantly impact his overall career average, even after discounting for innate talent. In other words, a better job fresh out of college leads to a better career. “If your first job is with McKinsey or Goldman Sachs, your future career would outstrip that of an equally talented person elsewhere,” Aiyar says.
The paper posits two explanations for this. In the first, dubbed the “human capital hypothesis”, a debutant who does well in a challenging first job develops a high level of skill—of human capital—that serves him well later. (After batting well at Perth, after all, batting well at the Wankhede Stadium seems far less daunting.) In the second, the market often doesn’t take initial conditions into account when examining a rookie’s performance—the sort of “signal bias” that Ramcharan grumbles about with West Indian selectors.
The rise in the volume of cricket-related economics work, Macdonald observes, in part reflects the rise of sports economics itself, as a legitimate and useful field of study. “In economics, the curse is that it’s very difficult to have a controlled experiment,” Aiyar says. “In a macro setting, there are constant shocks, or problems with data, or 200 things happening at the same time. The nice thing about sport is that it is so rules-based, and everything is measured so precisely.”
So when V. Bhaskar, an economist at the University of Essex, wanted to investigate decision-making within randomized trials, he turned to cricket’s coin toss and the subsequent choice between batting and fielding. “I study how rationally decisions are made,” Bhaskar says. “Cricket has many such strategic decisions, such as when to declare an innings, for example.”
More than one economist also mentions the sheer ease of access to cricket statistics via the ESPNCricInfo website and its powerful search engine StatsGuru. Last year, Ajit Karnik, a professor of economics at the Middlesex University campus in Dubai, spent hours on the website to hammer out equations relating the price and value of a player in the Indian Premier League. His paper was subsequently published in the Journal of Sports Economics.
Perversely, cricket’s very intricacies, which enable such microscopic levels of detail, can also clutter the path of economists hunting for conclusions. Karnik had to stress-test many, many variables to determine which were relevant to his equations, a process he calls “very painful”. Aiyar and Ramcharan had to carefully weed out all-rounders from their analysis of batsmen, to ensure that their equations reflected only batting prowess and not an all-round utility.
Bhaskar and Ramcharan see one other disadvantage: Writing a cricket-related paper means, as Ramcharan says, “you’re going to have to get past a bias in American journals, because the editors and referees don’t know the game that well”. This is not a trivial hurdle—but Ramcharan does revel in the flip side, of studying a sport he plays and loves.
“I’m working now, for example, on a project on US banks, and this includes detailed data at the county level—it’s hard to get a good sense of what’s going on,” Ramcharan says. “But you look at Michael Holding’s career, and you actually remember where those deliveries were bowled. There’s a lot of joy in that. It’s not just an abstract thing.”
samanth.s@livemint.com
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First Published: Wed, May 05 2010. 01 15 AM IST