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Combining his interest in sport with mathematics gave Dr James Reade an intriguing setting in which to study the economic behaviour of people.
As an economist, James is fundamentally interested in the decisions made by individuals, and how they affect outcomes. In sport, we have huge amounts of information on both decisions and outcomes, and so it provides an ideal place to observe economic activity.
The idea for this research project actually originates from an interaction with a PhD student. They asked for James's help in analysing a large dataset of betting prices on football matches.
“This piqued my interest – we looked at whether markets react quickly to new information, or whether it takes some time. I realised that the abundance of data in sport affords great opportunities to ask questions that other data sources haven't enabled us to find clear answers on. ”
James's research is driven by a desire to finding interesting insights. With this particular project, it provides insights for sports teams and people, as well as for economists. James believes the kinds of insights that economics can provide to sport are huge.
“Economics is about strategy, and optimal strategy given the information set available, and winning at sport is also all about strategy – the optimal strategy given the information set available. With sport, data exists to look into this in great detail – unlike most economic activity. So I see economists able to learn more about decision-making and the outcomes of it from using sport data, and the sport participants themselves being able to learn more about optimal strategies using the research from economics.”
James's research project contributed directly to the development of the Department's "Economics of Sport and Games" undergraduate module.
The module looks closely at a number of areas that are currently of considerable interest in sports economics:
“It offers plenty of insight into labour markets. For example, what is the impact of net migration? How does it impact investment by UK-based firms in native workers? What about discrimination? What are the outcomes of discrimination, and is there evidence for it? There are some great published academic papers looking at this in football in particular.”
The benefit of a sport-focused economics project is that students often have an intimate knowledge about why things happened the way they did, and this is incredibly helpful when trying to pull together an econometric model.
“I've always encouraged my econometrics students to do projects looking at sport, mainly because the purpose of econometrics is to model the data as best possible, and that involves knowing a lot about what is generating the data that we observe.”
James has given research talks to Formula One racing teams and betting companies based on the work that students have produced in his econometrics modules.
