Presentation

Drive for Show and Putt for Dough? An Analysis of the Earnings of the PGA Tour Golfers

DONALD L. ALEXANDER WILLIAM KERN WESTERN MICHIGAN UNIVERSITY (2008)

Background •Drive for show and putt for dough is an old phrase that has been around golf for ever.

•The meaning behind the phrase is that a better putter will reduce your score more effectively than being a better driver of the golf ball. •Driving the ball is what the crowd wants to see from you, but putting is really what puts the dollars in the bank at the end of the day. •The phrase comes from some simple math, that more shots are taken from and around the green compared to the long game. •I often disagree with this phrase, but my coach lives by it….

Literature review •The traditional wisdom has come into question lately.

•More and more golf analysts are adopting the view that driving distance has become a relatively more important determinant of success on the PGA Tour. •Price (2002) argues driving distance is not more important than ever in the game.

•“The new gospel in the 21st century preaches power. Today you drive for dough. At its highest level, it is a power game where winners checks more and more are deposited by home run hitters.” Saunokonoko (2002) •Several papers mentioned in the literature review are apposing the drive for show putt for dough phrase. •Several PGA Tours were questioned, all agreeing that the game has changed to where length is just or more important than short game.

Introduction •The data that was used came from the PGA Tour statistics from 1992-2001.

•“Unfortunately, almost all of the previous attempts to determine the contributions of skills to a players earnings or performance have used ‘contaminated’ measures of skills” (Moy & Liaw 1998, Rishe 2001, Shmanske 1992, Sommers 1994)

•A different approach to iron accuracy, putting, sand play and chipping was used to eliminate the multicolinarity problem.

Empirical Model Money = α + µ + βX + γY + ε it

it

X includes several player-performance or golf specific variables Y includes external variables ε is the error term µ is the individual-specific residual term

t

it

Variables •Dependent PGA Tour Prize Money

•Independent Golf Specific:

Non-player Performance

Driving Distance

Events

Driving Accuracy

Time

Iron Accuracy

Prize

Putts Sand saves

Chip

Results

n= 1718

Variable

Mean

Standard Deviation

Maximum

Minimum

Money

306,600

351,370.00

5,335,800.00

20,125.00

Events

26.52

4.57

38.00

14.00

Driving Dist

268.19

9.67

306.70

237.90

Drive Accr

68.94

4.84

82.50

52.80

Iron

0.00

2.39

8.18

-9.57

Putt

0.00

0.02

0.08

-0.08

Sand

0.00

5.58

19.66

-20.88

Chip

0.00

3.97

14.82

-16.88

Purse

59,677,000.00

24,908,000.00

104,660,000.00

35,201,000.00

Time

5.63

2.87

10.00

1.00

Variable effects on earnings Variable

Money

T-Stat

Elasticity Estimates Ln(money)

Elasticty Estimates

Constant

-4,420,323.00

-11.21

-4.46

Events

37,108.50

2.79

0.11

Events^2

-827.82

-3.19

-0.002

Drive Dist

11,728.44

10.26

11.11

0.04

10.63

Drive Accr

15,583.40

8.86

3.80

0.06

4.40

Iron

23275.20

7.12

0.00

0.07

0.00

Putt

-4,153,681.00

-13.47

0.00

-13.44

0.00

Sand

7,302.69

6.12

0.00

0.02

0.00

Chip

11,467.23

6.63

0.00

0.04

0.00

Purse

0.003

4.63

0.61

0.00

0.23

Time

-13,309.01

-2.26

-0.26

-0.02

-0.09

R^2

.37

.51

Interpretation •The results indicate that the explanatory variables performed as anticipated and are statistically significant at the conventional 1% and 5% levels. •The calculation to estimate the predicted impact of reducing putts is biased and explained in the paper. Therefore a new calculation was then used and the parameter was divided by the estimate and come to a estimated $319,514 value of one less putt per round

•The driving accuracy estimated a 10% increase on the sample mean to increase income by $123,000 where as a 10% distances increase would lead to a $340,000. •The paper shows that short game is worth more than the long game and that drive for show and putt for dough is still a valid term today.

Questions •What does the paper prove to be the most important skill in improving a PGA Tour pros bank account? •What was the problem with using a technology variable? •True or False, everyone that plays golf is simply an awesome person?

•True or False, did the paper agree with the adage drive for show putt for dough? •What is the main problem that occurs when regression models are made for golf?