EclectEcon

Bunting, Baseball, and Probabilities

I  recently posted on Facebook that I was frustrated because Jim Leyland, manager of the Detroit Tigers, always (well, frequently) seems to call for a bunt when the lead-off batter reaches first base. There were two comments.

• a former student, knowledgeable about Moneyball, said, "it's called 'manufacturing runs'". I think he was jerking my chain.
• a friend from many years ago posted that he thinks Leyland doesn't bunt enough. I clearly disagree.

The source of my frustration with Leyland's tactic (which is well-known) is the overwhelming evidence that the average number of runs scored in an inning is higher when there is a runner on first with no outs than when there is a runner on second with one out. Put differently, teams are more likely, on average, to score more runs if they don't bunt!

Yes, there will be times when the batter at the plate grounds or lines into a double play or strikes out, and yes, there are some batters who are so bad that you'd rather have them bunt than strike out or ground into a double-play (which is why it often makes sense to have pitchers bunt in the National League). But overall, roughly speaking, in general, you're more likely to score more runs by NOT bunting than by bunting.

I can readily imagine that the probability of scoring at least one run goes up when a team follows the bunt strategy, but the main times that is important occur late in a game when the team needs one run to tie or go ahead. It doesn't make sense to reduce the probability of having bigger innings earlier in a game. 

Leyland is clearly a bright and good manager. But this is one aspect of his game where it might be nice if he read more MoneyBall or Bill James or Baseball Prospectus material. 

Sims and Sargent?

I am, quite frankly, mystified that the Nobel prize in economics was awarded to these two model builders. Their models have done virtually nothing to help us understand macroeconomics in any useful way. And in the Nobel Prize committee's write-up, the economists on the committee demonstrate some serious ignorance. What I have in mind is this statement:

This change was primarily a reaction to economic events during the 1970s, when the inflation rate increased due to higher oil prices and lower productivity growth.

What? Maybe those things precipitated the inflation, but the inflation of the 1970s and 1980s would not have been nearly so serious or persistent had it not be ratified by the actions of central banks everywhere who dramatically pumped up the money supply. Supply shocks by themselves do not cause persistent inflation; only monetary authorities can do that.

One important aspect of their work is that policy makers have reaction functions. But that was part of the growing literature of the era. I didn't particularly think they made a major contribution in that aspect of macroeconomics.

Sims and Sargent are both way smarter than I can ever hope to be, but I don't think their contributions to economics were all that great. 

Prices and Sustainability

I recently received a call for papers from The International Journal of Sustainability Economics. I am, to say the least, skeptical about the economics that appears in such a journal. 

At the beginning of 21^st century the sustainability concept was mainly a basis for developing policies consistent with a continued use of resources into the future without causing environmental crisis. But the situation has evolved, and the global economic crisis in 2009 was the ultimate consequence of short-term economic thinking. We need a new form of economic development, addressing the needs of the present without undermining the needs of the future. The International Journal of Sustainable Economy (IJSE)addresses sustainability issues within economic theory and analysis.

Every time I read things on sustainability, I am struck by how rarely people mention using prices to promote sustainability. 

If people are so convinced that we are going to run out of x, y, or z, I encourage them to buy up access rights and options to mine/harvest/whatever x, y, or z. If they are right, they'll serve two functions:

• They'll drive up current prices and induce others to use less x, y, or z, and
• They'll make a fortune for their progeny.

But nope. Most people who write about sustainability have all sorts of plans for how to interfere with the price system, plans for telling others what to do, and plans for imposing their own forecasts on others who don't share them.

I wish people who are concerned about sustainability would do more speculating and less preaching. I wish they would do more to encourage the use of prices and less to interfere with those very speculators who are doing so much to make sure we have resources for the future.

More on Gun Control

My gut instinct is to oppose guns and to favour gun control legislation. But gut instincts can be wrong.

Ever since John Lott and others started examining the relationship between gun control legislation and crime, I've had to put my instincts in check. The evidence seems pretty strong that jurisdictions that allow people to carry guns have less crime. As one street person once said, "Are you really gonna mug someone if you think they might pull out a gun instead of their wallet?"

Here is just the latest tidbit of evidence used by John Lott to support his position. Excerpts:

Murder and violent crime rates were supposed to soar after the Supreme Court struck down gun control laws in Chicago and Washington, D.C.
 ...

But Armageddon never happened. Newly released data for Chicago shows that, as in Washington, murder and gun crime rates didn't rise after the bans were eliminated -- they plummeted. They have fallen much more than the national crime rate.
...

In the first six months of this year, there were 14% fewer murders in Chicago compared to the first six months of last year – back when owning handguns was illegal. It was the largest drop in Chicago’s murder rate since the handgun ban went into effect in 1982. 

Meanwhile, the other four most populous cities saw a total drop at the same time of only 6 percent. 

Similarly, in the year after the 2008 "Heller" decision, the murder rate fell two-and-a-half times faster in Washington than in the rest of the country. 

It also fell more than three as fast as in other cities that are close to Washington's size. And murders in Washington have continued to fall. 

I would rather not believe the evidence that keeps piling up, but it is too overwhelming to ignore.

Some years ago, when I was president of the Canadian Law and Economics Associaton, I tried to persuade people to invite John Lott to be a keynote speaker. People objected that he was too controversial.