Thaler-Massey winners and losers from the NFL draft 2009

Economist Kevin Hassett has taken to assessing NFL teams’ draft choices based on the Thaler-Massey strategy, which emphasizes a player’s value (based on performance and salary).

Hassett identifies four winners: New England Patriots, Denver Broncos, Detroit Lions Lions, and New York Giants.

New England’s coach, Bill Belichick,…ditched his first-round pick altogether and loaded up on four second-rounders. In addition, he traded some of his later picks for other teams’ second-round picks next year. The big news is that the Giants maneuvered to get two second-round and two third-round picks, elevating their final scores.

The big losers were the Washington Redskins, the New York Jets, and the San Francisco 49ers.

The Redskins once again revealed their extreme economic ignorance, trading away their second-round and fourth-round picks…The Jets made a classic error, falling in love with University of Southern California quarterback Mark Sanchez and virtually guaranteeing they will have a large number of undrafted scrubs on their roster. Given the high salaries at the top of the draft, Sanchez will probably not generate much value above that demanded by his salary, even if he becomes a superstar.

Thaler loves the Patriots draft and also gives a positive review to the Cleveland Browns. After entering the draft with the 5th pick overall, the Browns traded down three times to take center Alex Mack with the 21st pick, plus defensive end Kenyon Coleman, quarterback Brett Ratliff, safety Abram Elam, a second round pick from the Jets, and sixth round picks from the Buccaneers and the Eagles. That’s a lot of chances to pick up some solid starting players. Football pundits didn’t think so highly of the Browns draft, but none of them are economists.

Thaler-Massey winners and losers from the NFL draft

Grading an NFL team’s draft become a cottage industry among sports fans and pundits. It’s also a hobby for economist Kevin Hassett, who has taken the economic model developed by Thaler and Massey, and graded teams’ drafts for the past two years. The insight of the Thaler/Massey model he writes in a Bloomberg column, is that “because NFL teams all have to operate under a salary cap, a team can only become better than its competitors by having a number of players who perform far better than their salaries would indicate.”

Hassett has used data from five previous drafts to calculate a Thaler-Massey score for each team. He then uses that score to predict whether teams will have a better or worse record in the sixth season. So far, the model has been largely successful (with occasional misses like predicting New England’s 2007 record would fail to match it’s 2006 record.)

So who were the 2008 draft winners? The Kansas City Chiefs, the Baltimore Ravens, and the Atlanta Falcons.

And the 2008 losers? The Minnesota Vikings, the Cleveland Browns and the Jacksonville Jaguars.

The Thaler-Massey winners and losers match up well with the draft gurus over at Fox Sports who gave Kansas City, Baltimore and Atlanta A grades. The Vikings and the Browns got C and D grades, respectively, while Jacksonville graded out at a B. Over at ESPN, the correlation is mixed. Mel Kiper thought Kansas City again got an A while Baltimore and Atlanta got Bs. Todd McShay wasn’t terribly impressed with Jacksonville or Atlanta’s draft, but liked the Vikings draft.

NFL Draft 2008

We recently received an email suggesting that the number of offensive and defensive lineman taken in this year’s first round of the NFL draft was higher than in recent years. Taking a quick and crude look back at first round selections from 2000-2008, teams did select more linemen this year, 15, than in recent history. However, that number is within two standard deviations of the mean for those eight years – 11.12 with a standard deviation of 2.3 – so it would be hard to say that this year’s draft was a substantial outlier.

The graph of first round draft picks is posted below. Picks were divided into four categories: 1) Quarterbacks; 2) Linemen (offensive and defensive); 3) Skill positions (running back and wide receiver); 4) Defensive backs, linebackers, and tight ends. Kickers were excluded. There don’t appear to be any major surprises or conclusions to be drawn from these trends. All of the picks trade within relatively narrow ranges, and there are no extreme values for any of the four categories.

On the clock: Rationality — Behavioral biases in the NFL Draft

By Richard Thaler

With the NFL draft coming up this weekend it seems like a good time to discuss the role of an unusual sort of nudge in that context. Three years ago Yale’s Cade Massey and I released a paper analyzing the NFL draft from a behavioral economics perspective. As casual fans and observers of the draft we thought that teams were falling prey to a series of cognitive biases, including overconfidence, that led them to put too high a value on picking at the very top of the draft.

Since teams often trade picks it is possible to estimate the value teams put on choosing early. That price turns out to be very high. A team can trade the first pick for the eighth and ninth picks, or the last four picks of the first round. For these prices to be rational, the first player taken has to be much better than the eighth player (since he also gets paid nearly twice as much). It turns out that performance is related to draft order, but much less strongly than these prices imply.

Continue reading the post here.