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Thursday, August 23, 2007
Economics of Steroid Use

Interesting commentary on the economics of banning steroids as opposed to permitting anything-goes doping and steroid use in sports. I previously pondered the question (although not from an economic perspective) of why steroids should be banned, and got some very thoughtful comments, here.

Dave Hoffman at Concurring Opinions looks for an economic justification. He concludes, tentatively, that the social ills (particularly fan dissatisfaction) associated with steroids and doping are connected to monitoring for performance-enhancing drugs, not the use of drugs themselves. That is, if the leagues were not monitoring and exposing drug use, but allowing all the players to do what they could to play better, fans actually would be happier (assuming the drug-enhanced players were on their teams) by the benefits of improved performance. The costs of steroid use disappear if we do not know what the players are doing and only that they are improving on the field. The lone remaining cost is to player health, but Hoffman discounts that because players can control whether and how they choose to play along.

Dave then calls on his readers to make the economic case for or against anything-goes.

Randy Picker of the University of Chicago Faculty Blog makes the case against. Picker argues that the competitive advantage of doping disappears if everyone is doping. Competitive success is relative rather than absolute, thus the game looks exactly the same, competition-wise, if everyone is using enhancers. Except now we get the same level of competitive play combined with the potential and real physical harms associated with steroid use. So anything-goes yields 1) a no-better (in terms of competition) game and 2) worse-off players. That, he says, is an inefficient economic trade-off.

I agree with Picker's point as to relative competition and it is the first time I have seen the point made.

But is there an aspect of absolute competition, for which # 1 above may not be true? Is "the game" played by equally competitive drug users "better" than the game played by equally competitive non-users? An equal game played by "clean" players yields 61 homers as a season record, 755 homers as a career record, and 383 strikeouts as a season record. An equal game of enhanced players might yield 80 homers in a season, 800 in a career, and, say, 450 strikeouts in a season. The players are on a level playing field, but the level is higher than without steroids because the quality of the "human equipment" is better. To the extent we hold numerical records dear, this is another argument against anything-goes (the records are "tainted"). To the extent we want an overall better game (as indicated by numerical records and overall achievements beyond wins and losses) and steroids gives us that, might it then overcome the health trade-off?


Picker assumes that enhancers improve all players equally. Is there any support for that assumption?

Further, you seem to assume that enhancers will improve only batters' performance. If Picker is right, then why shouldn't pitchers also improve, leading to the same balance we have today?

Anonymous Anonymous -- 8/23/2007 5:43 PM  

There's another issue. Steroids are controlled substances. A sports league which allows its players to use steroids is condoning felonious behavior.

Anonymous Peter -- 8/23/2007 10:00 PM  


Good point on # 1. Empirically, medical science affects different people in different ways. So steroids may do more for some players than others. As to # 2, I am assuming hitters and pitchers using steroids, thus keeping the same balance we have, but at a higher level. An "unjuiced" Nolan Ryan struck out 383 "unjuiced" batters. So why wouldn't that balance be raised to 450 strikeouts? Nolan Ryan is that much better, even if the batters are as well; I think that means numbers go up.

The point of Hoffman's and Picker's posts was an economic analysis of whether steroids should be permitted by leagues and by the government. That is, if the analysis is right, then that should guide steroid policy by the leagues and society at large. So the posts are trying to take your issue off the table.

Blogger Howard Wasserman -- 8/23/2007 10:47 PM  

One more issue: as with BALCO's stuff a while ago, many drugs go undetected until agencies actually get the technology or awareness that allows them to identify a certain substance. Everyone was cheering Bonds for his impressive re-birth before it came to the fore that he might be using drugs (which went undetected for a while).

Therefore, the idea of banning substances will always have to deal with the fact that drug producing labs seem to be one step ahead of doping agencies. I don't believe this is a legally valid argument to uphold a doped league. But it is certainly valid from a practical stand-point, I think.

If agencies don't have the means to get all users, is it fair on the ones that keep clean or only have the means to use the "old" stuff? What's the point of having regulations if we don't have the means to enforce them to a full extent?

Anonymous Luis Cassiano Neves -- 8/24/2007 5:43 AM  

Interesting post Howard,

One thing that has been left out of this economic analysis is that steriod use (or perhaps abuse?), especially over a longer period of time often leed to injuries of the muscles and tendons. Anabolic steriods such as Winstrol and Nandrolone should not be confused with those steriods prescribed by a doctor to treat injuries. I would think that these injuries would be even more common in a drug-free-for-all league than in a drug-free league. this would lead to players often going on the injury list, sitting out many games every year, and probably also lead to shorter careers. I can't imagagine this having a positive economic impact on the leagues and teams, rather a negative impact should be expected.

Just a thought...

Blogger Jimmy H -- 8/24/2007 9:51 AM  

The fact that some cheating will happen because it can't all be detected hasn't deterred other regulations nor should it.

Based on what we have seen with the high death rate of pro wrestlers before age 50, I suppose having everyone juiced would bring a similar death prior to age 50 rate to the pro leagues improving the solvency of the retirement plans.

One assumption being made is that the rules would stay the same in all juiced game. I doubt that would happen.

Football is constantly tweaking the rules to improve player safety and those changes impact the flow of the game. The colleges have just moved back the kickoff point in football because it was felt kickers were reaching the end zone too easily. Goalposts have moved off the goal line to the end line to counter-act improved kicking and then the colleges eliminated the tee on placekicks for the same reason.

The NBA counter-acted the zone defense by outlawing it. The pros and colleges have adopted a three point line to cut down traffic in the lanes and now college is talking of moving the line back because the shot is being taken more than they like. There is near constant talk of using the international trapezoidal lane in domestic basketball.

Baseball could easily monkey with the strike zone, the mound, and stadium construction to circumvent the improvements.

Lastly you can always change the record keeping. The NCAA maintains pre-1973 and post 1973 statistics in basketball for rebounding because the style of play changed so dramatically that it was felt the pre 73 marks would never be reached.

Blogger Mark -- 8/24/2007 11:01 AM  

The point of Hoffman's and Picker's posts was an economic analysis of whether steroids should be permitted by leagues and by the government. That is, if the analysis is right, then that should guide steroid policy by the leagues and society at large. So the posts are trying to take your issue off the table.

I see.
In any event, the chances that steroids are going to be legalized anytime soon are zero. Most steroid users are not professional athletes looking for a performance edge and taking reasonable precautions. The typical user is more likely some 20-year-old who wants to get "ripped" so he can score with more chicks, and who needless to say uses the steroids in the most careless manner possible.

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Anonymous Anonymous -- 8/24/2007 12:30 PM  

After some more thought.

If we assume all players benefit equally from juicing the playing field does not remain equal.

Let's say team A has a power rating strength of 50 and team B is 40. In theory they meet and A should win by 10. But juicing improves everyone 10%. A would have a strength of 55 and B a strength of 44 and A should be 11 points better.

Or put another way, B would have to improve 12.5% just to keep up with A's 10% improvement.

One player can bench press 200 the other 220, a 10% improvement takes one to 220 and the other 242. Before one was 20 pounds stronger, now he is 22 pounds stronger.

Juicing reduces competitive balance even if all are doing it.

Now realistically all won't improve equally. My instinct is that the better physical specimen may have greater potential to improve because he/she has more to work with.

Back to health concerns.
If the pros can do it, then the pressure is on for college players to do it because they have a narrow window between their last game and the first pro camp to catch up to juiced players, plus since each will react differently a player's potential to respond well to juicing becomes part of the draft equation.

Naturally if it is allowed in college then the pressure is on high school players with hopes of a college scholarship.

When you extend downward you are raising the risk of the adverse impact of long-time usage.

Blogger Mark -- 8/24/2007 12:49 PM  

Mark, you're makingassumptions that I would like to point out:
First, you're assuming that "strength" e.g. in Baseball can be measured in a ratio scale, with an absolute zero and exact, non-arbitrary distances between measuring units.
Secondly, you're assuming that steroids improve strength through a multiplier, expressable in percent.
Thirdly, you're assuming that an increase in strength directly translates into an increase in performance of the same magnitude.

I'm in doubt about the first assumption as the function of muscle tissue (and I'm saying that with very limited medical knowledge) probably doesn't allow for such clean cut measurements, also taking into account the different sets of muscle that will have differing and non-linear effects.
For the second assumption I know too little on what effect steroids have, but at least the assumption would be 'romantic', as someone with a big natural talent (e.g. strength) would have an advantage over somebody with lesser natural talent because the steroids would act as an amplifier.
I'm especially doubtful about the third assumption, Baseball is too complex a sport to have strength directly translate into performance. For example your hitter may have so much more arm strength, but still doesn't hit the ball, resulting in no performance advantage whatsoever. The game is not mechanical enough for such an assumption to stand.

Anonymous ethone -- 8/25/2007 7:31 AM  


As to your point about changing rules: Picker begins his piece with a broader discussion of what competition is and when and why we (often) tweak rules to even that out. He touches on the point that, if anything-goes allowed anyone to get a unique advantage, the rules could be altered to keep the balance.

I agree with Ethone that improvement through steroids is not simple arithmetic. But Mark may be on to something in this idea of relative difference being enhanced by equal benefit, at least as to some things. And at some level, it is about strength--I hit the ball the same amount, but it travels 25 feet farther and flies 20 feet higher--so some numerical comparisons could be made, even in baseball.

Finally, yes, steroids will help players differently. But everyone seems to assume that steroids will help "physically gifted" players more than they will help schlepers, an assumption that may not be true. If everyone is using, steroids will most help those whose physical and genetic make-up are most respondent to drugs. Who that will be cannot be predicted and may have nothing to do with baseball ability. In other words (just to pick two players) steroids may help Jacques Jones more than they help Barry Bonds. This will not make make Jones a better player than Bonds, but it may bring them closer.

Blogger Howard Wasserman -- 8/25/2007 7:58 AM  

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