(This is a cross-post with StatsInsights.com)
The big news in the last few days is NASCAR levying harsh penalties to Penske drivers Brad Keselowski and Joey Logano. They each were fined 25 points because their cars' rear axle housings were skewed and not perpendicular to the chassis. It appears the penalties were applied because NASCAR felt they modified this part to gain an unfair advantage.
What are the implications of these penalties?
First, let's take a look at what 25 points means in the standings. Keselowski would be one rank higher, and Logano would be six ranks higher if not for the penalties:
|Table 1: Effect of Penske penalties in 2013 Standings|
But what are the longer-term effects? Before we get into the data, there are three basic hypotheses for what could happen:
- The penalty overwhelmingly hurts the team's performance for that year. This suggests the penalties are too harsh for the infraction.
- The penalty is too lenient, and doesn't incent teams to play by the rules. Teams continue taking advantage of the system, because they gain more points outperforming their competitors than they give up in penalties (assuming they are even caught).
- The penalty has no overall effect: presumably this means that the performance gained was equal to the points lost once caught. This suggests a fair penalty process.
Let's go back through 2007 and look at all the points penalties in Sprint Cup:
|Table 2: Recent Points Penalties|
- Source is Jayski.com
- We are ignoring Carl Long's penalty (because he didn't compete in any Sprint Cup races in those years - his was an All-Star race penalty)
- The blue zones at top are based on 2013 standings, and not finalized
What does the data teach us?
1) The average points finish of a penalized team is 21. This is right in the middle of the pack (of 43 cars each week), suggesting that NASCAR is penalizing teams equally up and down the performance spectrum (good, average, and poor teams are all getting penalized).
2) There is little evidence to suggest that the penalty makes any difference in performance. When comparing points in the penalized year with both the year prior and the year after, the average difference is basically 0. Notice in this table the rankings are all about 21/22.
|Table 3: Yearly Summary of Penalties|
|Figure 1: The difference in Season Rank averages 0|
3) If you ONLY look at the top 25 teams, there is some evidence that the penalties have an overall negative effect on them. Notice in this table the rankings decline from 11 to 12 to 13 in successive years.
|Table 4: Avg Season Rank of Top 25 Teams|
4) If you look ONLY at teams in the top 10, the penalties don't do enough to offset the year in which they got caught (improvement by 2 ranking spots over prior year), but the following year the teams drop an average of 5 ranking spots. This suggests that the cheating is worth a good short-term gain, but not worth it in the long run.
|Table 5: Avg Season Rank of Top 10 Teams|
What Relationships Can We Infer from the Data?
The effect of cheating and being penalized for it is negligible on the average NASCAR team. But the more competitive teams see the biggest gain from cheating, and conversely, the biggest drop in performance in the year following their penalty. This brings up a good short-term vs. long-term tradeoff question that each team can answer for themselves: is next year's loss from being penalized worth the short-term gains from bending the rules now?