My Master's Degree Thesis Blog

[ALostTexan]

As some Derby Trailer's know, I am currently finishing my Master's Degree at the University of Arizona Race Track Industry Program in Tucson, AZ. I have decided to write and edit my final project through a blog that I have established, and I invite that is interested everyone to check it out.

Essentially, I have had enough with the constant bitching that takeout is too high or too low. We have an argument between horseplayers and racetracks that has no basis for rational discussion.

Now, that may rub people the wrong way, but it is true. There is no rational basis for the discussion.

The problem is that all of the studies on churn that have been done that do show that decreasing the takeout will lead to higher revenues to everyone were done about 30 years ago. I am not saying that the topic has not been addressed by many people since then, but what I am saying is that there has been little true research on the topic in 30 years.

There have been isolated studies on the topic. For instance, you can look at what happened in New York when they dropped their takeout rates, but those studies did little to see the overall effect of dropping the rates on the industry.

So I am staking my academic career in Tucson to a study that uses economic principles and techniques to estimate the effects of altering takeout. I am in the middle of designing a Monte Carlo simulation to see what happens to the industry as a whole when the takeout rates are altered and see if we can produce results that are statistically accurate and significant, and hopefully begin a rational discussion on the topic.

I am also not doing this alone. I am working 3 statisticians from the University of Arizona, for instance, to verify my work, and I have had numerous discussions with industry experts on the topic. Among them are Maury Wolff, one of the smartest people to ever place a $2 bet, whom I have conversed with at length about this project.

All I am trying to do is show an economic model that we can all agree on, and if it does show that decreasing takeout is a smart move then we can move on to actually making it happen.

I will be posing a series of past studies on the blog over the next few days which will show the literature review that I have done on the topic. There are many studies done in the past on these topics, and these are important because they are academic studies - not studies commissioned by horsemen's groups or racetracks which can easily be biased.

The blog can be found at http://thesis.ushorseman.com, although right now there is only a similar entry like this that explains my reasoning for conducting this study. I hope that everyone will take a moment from time-to-time and see what progress I am having, and hopefully provide feedback on the study as I work to complete it.