At first glance, economics may appear to be little more than endless equations, calculations and decisions guided by intense mathematical analysis. But if you think there’s nothing more to economics than math, think again. Economics has broad applications that can venture into unconventional fields where math skills and economic know-how can complement other essential characteristics. Professional sports, for example, may seem like the antithesis to algorithms and equations, but it’s an industry where economics has triggered a revolution.
Using math to build winning rosters
Today, many professionals with educational backgrounds in economics go on to apply their expertise in unorthodox ways outside of traditional economic industries. Many have found great success and even sparked revolution in their fields. Perhaps no widespread change has been more visible than the statistical revolution in professional sports.
Professional baseball, football and basketball teams all use economic principles to make decisions and improve their efficiency as organizations. These practices were popularized through the nonfiction book and subsequent movie, “Moneyball”, which documented one professional baseball team’s ability to buy a winning roster on a tight budget by using statistical analysis to find underrated baseball players and sign them to contracts below their market value. Today, many baseball teams use advanced analysis to inform their roster moves and payroll spending in hopes of getting more bang for their buck.
These practices aren’t unique to baseball, although the sport is widely credited with spurring on the statistical revolution. New England Patriots head coach Bill Belichick holds degrees in economics and has successfully led an NFL football franchise that finds high-quality players at bargain prices, making it one of the most successful teams of the past decade. Professional basketball teams too, compile massive databases of information from regular-season games that is used in the offseason to make decisions regarding contracts and free-agent signings.
The ultimate goal—particularly in sports leagues where salary caps restrict spending—is to acquire the most talent by finding the greatest values on the market. That value isn’t always apparent on the surface, which is why economics has come into the fold.
Bringing math onto the field of play
In today’s ultra-competitive sports landscape, teams are constantly looking for ways to become better. If the numbers are right, the easiest way to improve overnight is to become more efficient as individuals and as a team unit. While many professional sports teams use economic principles when making roster decisions, the number of coaches and players using statistics and other analytical tools to improve their performance is also growing.
One of the biggest stories coming out of this summer’s NBA Finals concerned the analytics phenomena that took over the eventual champion Miami Heat. The change was triggered, to a large degree, by Shane Battier, a seasoned veteran known for being one of the most intelligent players in the game. Battier’s reputation has been as a role player whose intense analysis of the game taught him how to become more efficient—and thus more valuable to his team—than more talented players who chose not to use math to break down the game.
Battier’s ability to sell his teammates—most notably, reigning NBA MVP LeBron James—on the value of studying those sports metrics is considered one of the reasons the Heat became better as the year went on en route to their first championship in six years.
Although many sports minds are turned off by the intensive math and analytical thinking, economics has a fair amount of creative latitude and applications well beyond the standard fare. As numerous professional athletes and sports figures have shown, an economics background can be a great asset if you’re pursuing a career that requires critical thinking and analysis.
About the author: I live and work in the US Midwest, and enjoy following the business tech world. After furthering my education by receiving my bachelor degree in business, I have spent some time researching different business strategies and blogging of my discoveries. I am interested in application of economics training in unconventional fields and creative industries. Follow me on Twitter: @DawnAltnam
Photo Credit: Jeroen Bosman