How Economics Can Make You Better at Sport (and Help You Understand It)

Get your calculator ready.

This post is presented in partnership with Monash Business School.

Did you know that understanding sports from an economic point of view can help you get better at your game?

Yeah, you read that correctly.

It may come as a shock, but statistical analysis is helping basketball players take smarter shots, improving baseball teams’ win percentages and assisting AFL clubs with choosing their players.

Of course, if you’ve watched the 2011 flick Moneyball starring Brad Pitt—or better yet—read the book upon which it is based by Michael Lewis (who is also famous for writing The Big Short and Flash Boys), you’ll have a fairly good idea of just how powerful statistics can be when it comes to sport. If you haven’t, we’ll just put it this way: there is a lot more economics in sport than you might realise.

So, here’s how an appreciation of numbers and analytics can actually make you a better baller (and help you understand sport in general!).

How did Moneyball change baseball?

Monash Business School Economics Professor Robert Brooks tells Student Edge that since the beginning of the Moneyball phenomenon, there has essentially been a revolution in sports economics and baseball.

"There has been a lot of economic literature on competition structure and labor markets in sports," Professor Brooks says.

 "Since the Moneyball revolution that started in baseball, there has been a greater focus on economics and analytics dimensions in performance."

In US baseball, there were a lot of changes made in analytical collection, so now players, teams and fans know that certain actions on the field are more valuable than others.

Professor Brooks explains that the Moneyball revolution made teams take a closer look at their tactics and economic data. A lot of baseball teams came to an understanding that knowing a player’s on-base percentage was valuable.

So, what statistics do sports teams track?

In sports economics, it’s not just as simple as counting catches and goals. The data can be as complex as recording every move each player makes and then calculating the likelihood of that player’s next move.

"You don’t just necessarily count the number of possessions someone gets, because different possessions have different values," says Professor Brooks.

"You think of those in a possession chain and the likelihood of that possession chain scoring."

Sporting clubs also consider the composition of their teams; how many players there are, which ones are more valuable and whether or not they might be worth trading.

This is important to consider because it can impact how well the team plays together, how many goals or scores they make and whether or not spectators will be willing to pay to watch.

"You can think about it at a player level, but you can also think about it at a team composition level," Professor Brooks says.

"So, if you take something like basketball where there is a small number of players on the court, it’s fairly clear that recruiting one or two players can have a really big difference.

"This is more complex in an AFL setting where you’ve got 18 players on the field."

Professor Brooks explains that when the AFL Women's League (AFLW) was introduced in 2017, the initial challenge was determining the number and composition of the teams, due to the lack of a development pool. The AFWL launched with eight teams, before expanding to 10 in 2019 and 14 in 2020.

"If you get too few teams, it’s not attractive enough because people have their tribal loyalties to their teams. But if you get too many teams, it becomes less attractive because you take the talent pool and you spread it too broadly," he says.

Do we use statistical analysis in all sports?

While it might seem obvious that sports like baseball, basketball and AFL are tracking their players every move on the field or court, it’s not just team sports that use analytics and numbers to predict success and sporting outcomes.

"So, if you think about serving in tennis and you think about that as comparable to shooting penalties in soccer or shooting penalties in hockey, you’ve got to make a decision about where you hit the ball," says Professor Brooks.

"There’s now a lot of sophisticated analytics on serves and return of serves amongst tennis players and thinking about the economics of shot selection."

There are so many economic opportunities in the realm of sports. If there’s a sport you enjoy, you can guarantee they’re using data collection and analytics to build better teams and give you a better spectator experience.

With expertise in economics and sports management, you could start a career in sporting business development, pricing analytics, coaching roles or even better your odds as a player on the field.

If you’re interested in economics in sports, why not check out Monash Business School’s Bachelor of Economics, Bachelor of Business (Business analytics and statistics) or Master of Applied Economics and Econometrics?

Head to the Monash Business School website to find out more.

Header Image: Gene Wang via Getty Images