Tuesday, October 06, 2009

My Limitations as a Forecaster 

I am a terrible forecaster. I used to teach a class on economic forecasting. After teaching the class several times, my forecasting limitations were painfully revealed each semester. Just last week I told a reporter that I thought Chicago would get the 2016 Olympic Games.

In early August, when discussing the Michael Crabtree holdout here on TSE, I wrote " I expect that Crabtree will eventually sign a contract worth less than Heyward-Bey's before the start of the season." Crabtree is still holding out, again demonstrating my limitations as a forecaster, even though his contract will almost certainly be worth less than the one signed by Heyward-Bey. Of course the holdout also demonstrates Crabtree's limitations as a rational economic decision maker, but that's his failing, not mine. Anyway, a recent media report claims that Crabtree is now ready to resume negotiations because he is "getting bored just watching games this season." No word about whether he is "getting tired of not drawing a paycheck" or "worried about how far he might fall in the 2010 draft if he sits out the entire season."

Labels: , ,

Sunday, March 08, 2009

College Basketball Referee Compensation 

John Feinstein has an interesting column in today's Washington Post about David Hall, a college basketball referee. Sports officiating, even at the elite level, is a part-time job. The seasonal nature of sports contributes to this situation -- it was not that long ago that professional athletes in the NFL, NBA, MLB and NHL worked off-season jobs -- as well as the scheduling patterns in sports like football where games are played primarily on weekends.

But conditions in this labor market appear to be changing. Hall, and some other college basketball referees, are now able to make a full time living as referees. According to the article, the BCS conferences now pay as much as $2,000 per game, plus first class airfare and other travel expenses. Hall works aboout 100 games per college basketball season. You can do the math to figure out an estimate of his before tax compensation. He left his day job at a broadcase software firm a few years ago.

The column contains a couple of interesting economic tidbits. First, as we would expect, the non-BCS conferences have had to increase their compensation for referees. Second, again as we would expect, this switch from part-time to full-time employment seems to have led to an increase in the quality of officiating, and an increase in the demand for the services of the full time officials. According to Feinstein:
Guys such as Hall and East Coast officials Jim Burr, Tim Higgins and Mike Kitts (among others) are in so much demand these days that the second-tier leagues have taken to scheduling more games on Tuesdays and Thursdays in order to get them to work.

"It has gotten to the point where you schedule with referees in mind," said Doug Elgin, the commissioner of the Missouri Valley. "The good news is we can get those guys on their off nights from the BCS leagues. The bad news is we have to pay them BCS prices. Obviously we think it's worth it."
There's a lot of interesting economics going on here. For example, the implication about the relative quality of officiating has interesting consequences. The people who organize basketball contests appear to face heterogeneity in referee labor inputs and a quality-price trade off in that labor market. The move to full-time referees -- specialization -- and the associated increase in compensation, is a market-based solution to this particular problem. I wonder how bad the information asymmetries are in the market for college basketball referees? (Feel free to insert your own Tim Donaghy comment here).

Labels: , ,