## Do Draft Picks Equate to Wins? 2

Teams that have losing records tend to improve and teams that have winning records tend to get worse. There may be several reasons including the draft, but scheduling and other effects may also be factors. This isn't any revelation, except that it severely complicates the question of whether draft picks can be converted into wins.

My first regression was a simple single-variable model that estimated net wins based on a teams conventional draft points in the immediately preceeding draft. This time, the model will include the teams' previous year's record to account for the other factors that explain the tendency for teams to regress to the mean--better teams get worse, bad teams get better.

Because draft points are mostly a function of a team's previous record, I expected a large amount of overlap in their effect on future wins. To really isolate and understand each variable's effect on wins, it would take some creative "differential" regression--we need to run several different regressions and compare the results.

Including both draft points and last year's win totals in the model reveals the following. Last year's record is highly significant and the coefficient is negative (as expected--more wins last year means less this year). Draft points, however, is not significant (p=0.36) but still postitive. The adjusted r-squared is 0.38.

Regressing last year's wins onto the following year's wins (without any draft variables) results in a virtually identical r-squared of 0.38. This means that draft points do not contribute any significant predictive power to the model. The other factors that explain why teams regress to the mean dominate the effect of the draft. This is strong evidence that draft picks don't matter, at least when compared to other explanations for improvements in team wins.

I conducted numerous other regressions. For example, I used draft points from 1 and 2 years preceeding the current year, theorizing that draft picks require a year or two to mature before impacting a team's record. I also used the cumulative draft points from the preceeding years. Curiously, draft points from 1 year ago was significant at the p=0.10 level, but its coefficient was negative. In other words, teams with high picks the year preceeding the season in question tended to get worse.

The table below summarizes many of the regression models I ran. Each row is one model. Significance is denoted by asterisks (p=0.10, 0.050, and 0.01 levels). Negative coefficients are in red.

No matter how it's sliced, previous year wins dominates the model.