Measurement Error and the Hot Hand
Daniel F. Stone
Bowdoin College - Department of Economics
February 1, 2012
The American Statistician, 66(1), 2012
This paper shows the ﬁrst autocorrelation of basketball shot results is a highly biased and inconsistent estimator of the ﬁrst autocorrelation of the ex ante probabilities the shots are made. Shot result autocorrelation is close to zero even when shot probability autocorrelation is close to one. The bias is caused by what is equivalent to a severe measurement error problem. The results imply that the widespread belief among players and fans in the hot hand is not necessarily a cognitive fallacy.
Number of Pages in PDF File: 17
Keywords: hot hand, overinference, measurement error, basketball
JEL Classification: D3, D83, L83
Date posted: April 10, 2011 ; Last revised: August 27, 2012
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