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Correcting for bias in hot hand analysis: Analyzing performance streaks in youth golf

Author

Listed:
  • Christopher Cotton

    () (Queen's University)

  • Frank McIntyre

    (Rutgers University)

  • Joseph Price

    (Brigham Young University)

Abstract

This paper illustrates the problems that arise with traditional tests for the hot hand and proposes instead using a consistent dynamic panel data estimator, which corrects for these problems and is easy to implement. Applying this estimator to a large dataset of amateur, youth golfers, we find no evidence of either hot or cold hand effects, even among the youngest golfers. When we restrict attention to the most-amateur of the golfers in our data, we do see weak evidence of a small hot hand. Thus casual athletes may experience small hot hands, but the effect does not persist among more serious athletes. This may give insight into why the belief in the hot hand in professional sports exists, even when the evidence suggests otherwise.

Suggested Citation

  • Christopher Cotton & Frank McIntyre & Joseph Price, 2016. "Correcting for bias in hot hand analysis: Analyzing performance streaks in youth golf," Working Papers 1366, Queen's University, Department of Economics.
  • Handle: RePEc:qed:wpaper:1366
    as

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    File URL: http://qed.econ.queensu.ca/working_papers/papers/qed_wp_1366.pdf
    File Function: First version 2016
    Download Restriction: no

    References listed on IDEAS

    as
    1. Joshua B. Miller & Adam Sanjurjo, 2015. "Surprised by the Gambler’s and Hot Hand Fallacies? A Truth in the Law of Small Numbers," Working Papers 552, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    2. Louis T. Cheng & Lynn K. Pi & Don Wort, 1999. "Are There Hot Hands Among Mutual Fund Houses in Hong Kong?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 26(1-2), pages 103-135.
    3. Livingston, Jeffrey A., 2012. "The hot hand and the cold hand in professional golf," Journal of Economic Behavior & Organization, Elsevier, vol. 81(1), pages 172-184.
    4. Daniel McFadden, 2006. "Free Markets and Fettered Consumers," American Economic Review, American Economic Association, vol. 96(1), pages 5-29, March.
    5. Camerer, Colin F, 1989. "Does the Basketball Market Believe in the 'Hot Hand'?," American Economic Review, American Economic Association, vol. 79(5), pages 1257-1261, December.
    6. Klaassen F. J G M & Magnus J. R., 2001. "Are Points in Tennis Independent and Identically Distributed? Evidence From a Dynamic Binary Panel Data Model," Journal of the American Statistical Association, American Statistical Association, vol. 96, pages 500-509, June.
    7. Hendricks, Darryll & Patel, Jayendu & Zeckhauser, Richard, 1993. " Hot Hands in Mutual Funds: Short-Run Persistence of Relative Performance, 1974-1988," Journal of Finance, American Finance Association, vol. 48(1), pages 93-130, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Hot hand; Sports economics; performance streaks; amateurs versus professionals; dynamic panel;

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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