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An Economist’s View: Using Trade Data to Predict the Final Four

April 4, 2014

Natalie Soroka is an economist in the International Trade Administration’s Office of Trade and Economic Analysis. She spends more time focusing on international trade statistics and trends than on basketball…

Economist Natalie Soroka used trade data and an unorthodox equation to predict the winner of the Final Four. Her prediction is Wisconsin beating Florida.

Economist Natalie Soroka used trade data and an unorthodox equation to predict the winner of the Final Four.

The emotional whirlwind of March Madness is nearing a close, with the Final Four teams getting ready to face off this Saturday. Brackets have been busted, face paint smeared with tears, hearts have been broken, and our Cinderellas have turned into pumpkins, but it’s not over yet!

Who will be victorious? Is there anything in the trade data that can give us a clue? Let’s give it a try, shall we?

Methodology:

One can reason that there are several aspects (“variables”, if you will) that can help a team attain the title of national champion:

  • skills or talent,
  • nutrition to keep players healthy,
  • healthcare and medicine to take care of injuries, and
  • supplies for actually playing the game.

In other words, to be a little “mathy” about it (just bear with me):

Winning = ƒ(skills, nutrition, healthcare, supplies) + ε

Translation: Winning is a function of the variables listed above, plus that little “ε” at the end, which would be the error term indicating that there are various things we aren’t able to account for (Mercer, anyone?).

So if we were to try and look at these four variables in an extremely simple analysis, using the very same publicly available data we use to counsel U.S. exporters, can we predict a winner?

 

Skills and Talent:

We may not have data readily available on “skill” or “talent,” but as these players are all represent educational institutions, we can assume that the state’s educational services industry plays a role.

Among the four states represented in the Final Four, Florida has the largest educational services industry by far, amounting to nearly $8 billion in 2012, topping Connecticut’s respectable $4.7 billion. On the Midwest/West side, Wisconsin’s $2.7 billion educational services industry tops Kentucky’s $1.1 billion.

But what about exports? After all, we are the International Trade Administration. The Institute of International Education collects information on foreign students hosted by U.S. universities, which can be used as a proxy for higher education exports. While not all players are international students, one could reason that a school (or state) that has international appeal is also one that would be able to pull the best talent.

Using the IIE’s data (which we also highlighted in a blog post last week), the University of Florida tops the list with 5,961 foreign students. The University of Wisconsin again has the upper hand over Kentucky here, with 5,291 international students. Finally, we can take into account each university’s seed at the beginning of the tournament as an indicator of the team’s record and other skills not captured above. Who comes out on top?

Winners:

University of Florida v. University of Connecticut: Florida

University of Wisconsin v. University of Kentucky: Wisconsin     

Nutrition:

Healthy eating makes for healthy people and athletes. Looking at state import data, Florida tops the list for its imports of products such as meat, fish, fruits, vegetables, and grains. However, isn’t Wisconsin in the Midwest, the home of those “amber waves of grain”? In fact, with its $4.5 billion farming industry in 2011, Wisconsin does come out on top among these states, followed by Florida, Kentucky, and Connecticut.

Finally, we can take a look at who imports the most processed foods, the “bad guy” du jour when it comes to health. Despite being known for its citrus fruits and water springs, Florida blows its competitors out of the water with $1.9 billion in processed foods imports in 2013, worsening its overall nutrition rating. Instead, Kentucky comes out on top with only $233 million of processed foods imports.

So who wins the “healthiness” battle? Looks like those amber waves really help.

Winners:             

University of Florida v. University of Connecticut: Florida

University of Wisconsin v. University of Kentucky: Wisconsin     

Healthcare:

As we’ve all seen, injuries sadly do occur. When these unfortunate events take place, good healthcare services and medical supplies are necessary to fix up young players and get them back on the court.

Again, we see Florida rising to the top over Connecticut with its $67.5 billion healthcare services industry in 2012, and Wisconsin topping Kentucky at $23.5 billion. With regards to medical supplies, Kentucky tops the rest of these states when it comes to imports of pharmaceutical products, with $4.6 billion of imports in 2013. However, for medical and surgical instruments, Florida again tops the list with nearly $2.3 billion of imports in 2013, followed by Wisconsin’s $1.5 billion of imports.

Overall, Florida wins on healthcare, driven by its large industry and imports of medical instruments.

Winners:             

University of Florida v. University of Connecticut: Florida

University of Wisconsin v. University of Kentucky: Wisconsin     

Sports Supplies:

What good is a basketball team if there’s no basketball to dunk?

Kentucky topped these states when it comes to imports of inflatable balls (including basketballs), at $35 million in 2013. As for other supplies, Wisconsin rose to the top in imports of athletic footwear, coming in at $70 million in 2013.

Finally, to keep the athletes in shape off the court, Wisconsin again topped the list with $105 million in imports of general gym equipment, pushing the state to the top of this category.

Winners:             

University of Florida v. University of Connecticut: Florida

University of Wisconsin v. University of Kentucky: Wisconsin     

So where does that leave us? If we average out the “scores” for each state/team, we wind up with one state’s economy pushing its team to the top:

University of Wisconsin (Go Badgers!)

However, if my personal bracket is any indication, that “little ‘ε’” isn’t quite so little, so you may be best off just throwing a dart and picking one at random. Generating purely random scores for the Final Four teams, we wind up with (……drumroll…….):

University of Florida (Yay Gators!)

Using random selection, Natalie's bracket points to Florida beating Kentucky in the championship.

How will this analysis fare? Will data help the Badgers win the day, or is the championship at the mercy of the court gods? I suppose there’s only one way to find out.

Enjoy the games!

 

No economists were harmed during the creation of this off-the-cuff and highly spurious analysis. The author drew on extensive basketball experience gained from middle-school gym class, casual sports viewership, and years of practice using the esteemed “mascot method” of bracket picking.

Domestic production data is the latest available from the Bureau of Economic Analysis’ Regional Economic Accounts. State import data was retrieved from ITA’s TradeStats Express platform: http://tse.export.gov/stateimports.

4 comments

  1. Great article. I think this gives us a lot of in-site on how things work.


  2. There are many schools are providing good education in all around the world. In that mainly best CBSE schools are present in US, UK, European Countries and India. Each school are handling the students in a different way. Mostly in North side schools are really teaching superb. When the students are cross out from the school , each students have the capacity 90 % what they have learnt in school . In Yelahanka, schools are providing best education when compare other schools in India.


  3. “Florida blows its competitors out of the water with $1.9 billion in processed foods imports in 2013, worsening its overall nutrition rating. Instead, Kentucky comes out on top with only $233 million of processed foods imports.” Have you adjusted a) for the number of residents or potential eaters, i.e. would not a per capita figure more apt to base comparisons on? b) Have you deducted exports/outflows from that state for the same commodity, e.g. if the food was only repackaged there or is that not part of the import figure but kept separate?


  4. Being a business oriented person, I found the data in the article quite useful. The insights will help me succeed to gain a better future.



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