What basketball has in common with Econ 101 : Planet Money The introduction of the three-point line changed how people play basketball. And it has some compelling parallels to economics.
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The 3-point line was introduced into the National Basketball Association, the NBA, back in 1979, partly as a way to give shorter players a better chance to compete with the tall players, the tall ones who had been dominating the sport by standing close to the basket and shooting or dunking over the little guys.


Score one for the little guys because, you know, back then, back in 1979, making any shot was worth only 2 points from anywhere on the court. And the idea was that adding this 3-point option would incentivize players to take more long-range jump shots, something even short players could do competitively. And that would add variety to the game.

GARCIA: And the 3-point line is about 24 feet from the basket, except from the sides of the court, where the line is a little closer. But the first year after it was introduced, that 1979 season, not many 3-pointers were actually tried. Only 1 out of every 33 shots taken was a 3-pointer.

VANEK SMITH: But after that, almost every year, that number of 3-pointers went up. And it started rising really sharply earlier this decade. So by last season, more than 1 out of every 3 shots attempted was a 3-pointer. And the game is now dominated by these 3-point shooting virtuosos like Stephen Curry with the Golden State Warriors and James Harden of the Houston Rockets.


MICHAEL BREEN: Steps back, 3-pointer.

Curry way downtown - bang, bang.

Bang. Bang.

Bang. That one goes down, and the game is tied.

VANEK SMITH: Bang. Oh, bang, bang.

GARCIA: That's a great splicing. Announcer Mike Breen...

VANEK SMITH: Let's become sports announcers, Cardiff.

GARCIA: ...Announcing bang when a 3-pointer's made is, like, my favorite thing.

VANEK SMITH: Once I understand the rules completely, I would love that job. I'm Stacey Vanek Smith.

GARCIA: And I'm Cardiff Garcia. Today on the PLANET MONEY INDICATOR, the story of the 3-point shot's takeover of basketball, the economic lessons of how it changed the game and why it is now having unintended effects that could be a problem for basketball's future.



VANEK SMITH: For someone who specializes in basketball analytics and his work for teams like the San Antonio Spurs and the USA National Team, Kirk Goldsberry has kind of an unusual background.

KIRK GOLDSBERRY: I got a Ph.D. in geography and was a professor of geography for six years at Michigan State and Harvard and then started applying map-making and data visualization techniques to basketball data, which is the love of my life.

VANEK SMITH: Kirk is the author of the new book "SprawlBall," which tells the story of how the 3-point shot came to take over the NBA this decade.

GARCIA: A big part of that story is that basketball teams had already been gradually embracing the new tools of analytics that Kirk is talking about. And they started hiring more people like Kirk himself, people who could analyze where on the court players were making and taking the most shots, how to position players on the court to maximize their chance of scoring. And what these analysts pointed out was that taking more 3-point shots made mathematical sense if teams wanted to win.

VANEK SMITH: And the reason for this is simple. So 3 points is, you know, obviously more than 2 points. But it is actually a lot more than 2 points. Three points is 50% more than 2 points. So even if the player makes slightly fewer of his 3-point shot attempts than of his 2-point shot attempts, he can still end up scoring more overall points by shooting more 3-pointers.

GARCIA: Yeah. And here is what Kirk found when he analyzed the data. Other than shots taken really close to the basket - and I mean, like, within 5 feet of the basket, where a player almost can't miss - it almost always makes mathematical sense for a team to shoot a 3-pointer instead of a 2-pointer.

GOLDSBERRY: It's that wild margin of inefficiency that's driven sort of these cartoonish trends in shot selection and the rapid increase in 3-point shooting across the NBA.

VANEK SMITH: And that is the first economic lesson that you can take from Kirk's analysis of basketball. For a team to win, efficiency matters. A team has to make good use of the finite resources it has. The very definition of economics, in fact, is the study of how choices are made in a world of finite resources. For most organizations, that means making the best use of their workers or their equipment or their ideas. But for a basketball team, one of those finite resources is the number of shots that its players can take.

GARCIA: Yeah. The number of shots is limited by the fact that a basketball game is only 48 minutes long. Plus, possession of the ball switches to the other team after one team makes a basket.

VANEK SMITH: And the shot clock.

GARCIA: That's right. And to state the obvious, to win a lot of games, a team wants to get the most possible points out of its limited number of shot attempts. What analysts like Kirk have found is that this means taking more 3-pointers.

VANEK SMITH: But, you know, old traditions die hard, especially in sports. So in addition to the rise of analytics, something else had to happen for the 3-point shot to really take off and become so popular. The sport had to develop the players who could make the 3-point shot consistently. And this took a while because a new generation of players had to start practicing 3-pointers over and over again from an early age. And a new generation of coaches had to let those players shoot more 3-pointers during games.

And, you know, maybe no player has embodied this change quite like Stephen Curry of the Golden State Warriors. The Golden State Warriors, of course, are now playing against the Toronto Raptors in the NBA Finals.

GOLDSBERRY: I mean, he's the MVP two times over and still playing in - this is now, I guess, their fifth finals in the last five or six years. And, you know, it's been a remarkable demonstration of how a great shooter can win championships and win MVP.

VANEK SMITH: And that is the second economics lesson from Kirk's analysis. The skills that are in demand are the skills that will be rewarded. Making 3-pointers used to be this kind of niche skill, a specialty. But now it's a requirement. Players who can't shoot the three - 3-point shot - are at a bigger risk of losing their jobs.

GOLDSBERRY: So it used to be maybe a dozen or two dozen NBA players could shoot threes. Now a dozen or two dozen NBA players can't shoot threes. And that took a generation for us to get to.

VANEK SMITH: But that brings us to economic lesson No. 3, the relentless pursuit of efficiency can have some unintended consequences.

GARCIA: Yeah. Think about it. Since the most efficient shots in the game are either the shots taken right underneath the basket or very far away behind the 3-point line, the value of all the 2-point shots in between those places has diminished - the fadeaway, the elbow jump shot, the player who takes his man off the dribble before pulling up from 10 feet away. Don't worry if you don't recognize the references I'm making.

VANEK SMITH: (Laughter).

GARCIA: It is enough to know that this was a beautiful and artistic part of the game.

GOLDSBERRY: Those exact shots that we associate with Michael Jordan are virtually, you know, nonexistent. It's not to say mid-range shots are completely dead, but they're trending that way and trending that way fast.

GARCIA: And it's not just 3-pointers. Analytics has also shown that foul shots, which a player gets to take when he gets fouled in the course of shooting, are also very efficient shots to take. So some players, especially James Harden, now try to bait their opponents into fouling them even without trying to make their actual shot. This is cynical, unsportsmanlike behavior, but it also works.

VANEK SMITH: Economists like it.


UNIDENTIFIED ANNOUNCER: From Houston, Texas, Harden fires. And he is fouled by Hart (ph).

VANEK SMITH: The result of this - analytics is changing the aesthetics of the game, Kirk says, and not necessarily for the better. If basketball keeps going in the direction that analytics has pointed it, the players might all start looking the same, loitering behind the 3-point line waiting to shoot, or, you know, trying to get fouled. There won't be as many players dribbling hard to the basket, using their athletic wizardry to get an open shot or, you know, perfecting their mid-range shots. The game could become less varied, less interesting, a little boring, maybe.

GARCIA: And you can't really blame the teams or the players for this, by the way. They're just following the incentives provided by the rules of the NBA. That is economic lesson No. 4, incentives matter. If you don't like how James Harden plays the game, well, as Kirk says, you really should hate the game, not the player.



VANEK SMITH: To stop these trends and reinforce basketball's variety and dynamism, Kirk says the NBA might consider changing these incentives, changing the rules again, just like it did when it introduced the 3-pointer back in 1979, maybe by moving the 3-point line farther away, making it, you know, a harder shot.

GOLDSBERRY: I think what's going to happen in the next decade for analytics, particularly in basketball, is just that. We're going to start to look at this at the league level and try to optimize the sport and encourage an incredible aesthetic by leveraging analytics at the league office.

GARCIA: The willingness to change the rules to keep basketball interesting is, after all, a big part of the NBA's heritage. That's partly why basketball can be so fun to watch. It's a fluid game that evolves over time, combining art and science, aesthetics and analytics...

VANEK SMITH: And hot dogs.

GARCIA: ...And an understanding of economics and an understanding that economics isn't everything. Game 5 of the NBA Finals is tonight.


VANEK SMITH: This podcast was produced by Rachel Cohn, fact-checked by Emily Lang and edited by Paddy Hirsch. THE INDICATOR is a production of NPR.

GARCIA: Like Stephen Curry. That one gets...


VANEK SMITH: I told you.

GARCIA: I forgot.

VANEK SMITH: I said I don't know anything about basketball.

GARCIA: No, actually, I made a little note in my head earlier. I was like, remember to tell Stacey that it's Steph Curry, Stephen Curry.


GARCIA: But, like, it doesn't - it looks like Steven (ph).

VANEK SMITH: It looks like Steven (ph).

GARCIA: It totally looks like Steven (ph).

VANEK SMITH: I'm calling him Steven (ph).

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