Inspired by the work of my economics professor Roland G. Fryer on the marginal effect of getting into one of the three premier exam high schools in New York City on academic achievement, I decided to take a look at the effect on career outcomes of being one of the last four first rounders in the NBA draft compared with being one of the first four second rounders.
Fryer examined the admissions of Stuyvesant, Bronx Science and Brooklyn Tech assuming that those students just below the cut-off rates on the admissions tests could be considered similar in intelligence, talent, and motivation etc. to those just above the cut-off line. Thus he and his research partner Will Dobbie were able to estimate the effect on academic outcomes (college acceptance, graduation etc.) of attending one of these schools. It turned out that there was little to no effect on academic outcomes for students on either end of the line. Students of a certain caliber tend to succeed no matter their high school setting.
Can the same claim be made about players in the NBA draft? The difference in talent between the 30th and 31st picks in the NBA draft is marginal. Any number of factors could decide why one player is the last pick of the first round and another is the first pick of the second. Maybe No. 30 filled a need even though No. 31 was the best player available; maybe No. 30 had a better interview with the team drafting him than No. 31 did, etc. It’s safe to assume that there are negligible baseline differences in talent, ability and motivation between the first four picks of the second round and the last four picks of the first.
That being said, first round picks have their contacts guaranteed, while those selected in the second round do not. The last pick of the first round—usually—joins the defending champion while the first pick of the second round—usually—joins the worst team in the league. Coaches and GMs may be more inclined to give first round picks more time to develop than they would second rounders just because of their distinction as a first round investment.
We can therefore consider the selection of a player in the first round as similar to that of being accepted to Stuyvesant. The last pick of the first round isn’t much better than the first of the second round, but he’s afforded more opportunities to succeed, and in some cases even helped along the way.
To try and estimate the treatment effect of being taken in the first round I looked at the careers of the first four picks of the second round and last four picks of the first round from every draft between 1985 and 2007 (1985 is the year the NBA draft lottery started; 2007 allows for the average NBA career to have concluded by 2012).
The mean per game totals are below, along with games played, relevant shooting percentages, career win shares and years in the NBA.
As you can see, players taken at the end of the first round tend to have significantly better careers than those taken at the beginning of the second round. Across the board this difference in draft position corresponds to a 33.2% increase in production, regardless of position. But couldn’t this just be a function of teams being smart and taking better players earlier?
If that were the case, then a similar increase in production would be expected for each cohort of picks—there’s no reason to think front offices are better at assessing talent between the 29th and 31st picks than they would be assessing talent between the 21st and 25th. If anything, you would expect the ability to differentiate talent to increase as you near the top of the first round—the NBA is a star driven league and teams devote most of their draft resources to making sure they get the best players they can at the start of the draft.
It turns out, that even though those players taken in the four spots preceding the last four picks of the first round do have better careers, the difference is not near as distinct. Below are the means for the last four picks of the first round and the means for the four picks immediately preceding them.
This difference in draft position accounts for an 8.1% increase in production, not even close to the 33.2% difference we see between the last four picks of the first and first four picks of the second round. It seems that, unlike New York public schools, the cutoff line in the NBA between first and second round has a rather significant impact on a player’s career outcomes.