THE BOOK--Playing The Percentages In Baseball

Didn’t you post something on here a while back about “odds ratio”, which was a better way to determine the results of a matchup than just taking the simple average?  Would that be appropriate in this situation, in trying to determine the Patriots’ chance of scoring versus the Giants’ chance of stopping (and vice versa)?

Yes, the Odds Ratio method does work here as well.  The .639 is based on the odds ratio method.  And the simple average of .500 and .758 is .629.

Now, of course, the more granular the statistics you use for a team, the less the noise, and the more the resultant w% gets “automatically” regressed.

The worst “handicapper” will use teams’ w/l % to handicap a contest.  That is horrible of course, and each team’s w/l record would need to be regressed a lot (not to mention normalizing or adjusting for strength of schedule).

The second worst handicapper is going to use average point differential per game, which is the same thing as or similar to using a pythag record for baseball.  Even then, you would still have to regress quite a bit, I would think.  And adjust for context (that goes without saying for any stat or stats).

The next best handicapper will look at yards per possession on offense and defense and add in special teams, field goals, turnovers, etc.

And the “almost best” cappers will adjust that data for context, relevance, etc., such as kneel downs, spikes, etc.

But, there are two critical things or mistakes that most if not all handicappers miss/ignore.

That is, one, regression, regression, and regression.  Even at the most granular level, you HAVE TO regress all of the stats, some a lot more than others.  For example, turnovers are mostly luck (some turnovers more than others), and thus have to be regressed a lot.

And two, and I have not read the blog that Phil refers to, and this is the one thing that almost all handicappers err on, is the idea that one year of data is “magic.” That relates to the first thing of course. If you are going to use one year of data to evaluate a team, you are necessarily going to have to regress a lot, especially when you are talking about only 16 or 18 games (I don’t know how many “trials” that correpsonds to in the NFL, as compared to the other sports - Tango had a post a while ago wherein he showed how many NFL games is equivalent to how many NBA games, NHL, MLB, etc.).  And more importantly, why not use more than 1 year of data on NFL teams and/or the individuals on the teams?  Can you imagine using only one year of data for MLB player and team projections?  It wouldn’t get you very far.  Yet, almost every handicapper and (betting) analyst known to man does this.

It ain’t going to get you too far.  That is how the line is created in the first place, which makes the line quite accurate as compared to any “system” that also uses one year of data (and especially with little or no regression - the linesmakers do not FULLY comprehend the notion of regression, although they realize to some extent that NE is not “really” a 19-0 team, etc.).

On top of which, even after they figure out what the line “should be”, they have to adjust it based on how much action they think the line will get on either side, right?

Let me ask you something.  Let’s say the “crowd” is expecting a +10 line.  Let’s say the sabermetric line is +16 points, but the gut feel of the linemaker is that it’s too high.  He puts it out there anyway, sees too much action on one side, and sets it to +14.  Even if the crowd might have guessed a +10 line before seeing the +16, will the line settle at +14 because the crowd’s initial +10 has been rethought seeing the +16 line?

Similarly, let’s say that the sabermetric line is +16, the oddsmaker has a gut feel that people think it’s +10, so he decides to bring it down to +14.  Again, heavy action on one side forced the linemaker to put the line at +12, and the crowd’s initial feel of +10 has been reshaped based on the opening line.

Or, let’s say the linesmaker has the +16 sabermetric line and the gut feel +10 line of the crowd.  Knowing he can shape their feelings, sets the line at +12.  Will the line stay there, or still move to +11?

That is, no matter what the line should be, it’s almost irrelevant, as the sabermetric line is really more of a guideline for the linesmaker, and he’ll simply go by the seat of his pants.

Is this how it works in practice?

Yes, more or less.