I have always been fascinated by the topic of referee/umpire discrimination in sports.  In early 2009, I came across a working paper by Parsons et al, “Strike Three: Umpires’ Demand For Discrimination“.  It has recently been published in the June Edition of American Economic Review.  The results are both fascinating and depressing:

  • In ballparks without computerized cameras to evaluate umpires (QuesTec), pitchers who have the same ethnicity as the umpire receive favorable treatment, in the form of a slight (but significant) increase in pitches called strikes.
  • Pitchers who have the same ethnicity as the umpire are more likely to try to paint the corners (the area with the most umpire subjectivity) than those who don’t have the same ethnicity.  Thus, these pitchers seem to be aware of the favorable treatment.
  • The effect completely disappears in ballparks that use QuesTec (explicitly monitory umpire behavior)!
  • The effect completely disappears as well with implicit monitoring (high attendance, or pivotal at bat)!!

A note about R-Squared. 

If this is your first time reading an academic paper, you might be surprised at the R-Squared values hovering around 9% (For Example: Table 4, page 1421).  After all, the authors are only able to explain 9% of the total volatility, a number that would be extremely low if you are used to mutual fund R2’s to their benchmarks.  However, when you consider that the data set has more than 3,000,000 pitches, it really isn’t that low.  What is perhaps more important than R2, is whether the variables are significant.  Another topic for another day.

Category: CAIA, CFA, CIMA

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