THE FLAWED 2017 AMERICAN HORSE COUNCIL ECONOMIC-IMPACT STUDY

The American Horse Council is a longtime strong advocate for equine endeavors in the United States.  The organization’s efforts in the nation’s capital have been invaluable…so I write this post in the spirit of helpfulness rather than criticism.

Currently, the AHC is conducting a “horse owner and supplier survey to update the [2005] National Economic Impact Study.”  Unfortunately, the study will not achieve the desired result because its data-collection methodology is manifestly unscientific.

On July 19, 2017, the AHC put this notification on its website:

“The American Horse Council Foundation (AHCF) announced today that it will be extending the deadline to complete the horse owner and supplier survey to update the National Economic Impact Study [of 2005] to August 18th.

‘The survey has been open since the beginning of June, and unfortunately we have only had around 9,000 responses,’ said AHC President Julie Broadway.  ‘We decided to extend the deadline for respondents to take the survey to ensure that we are getting as many responses as we can—we estimated that the survey link should be reaching approximately 900,000 people, and the 2005 Study had over 18,000 responses itself.  The industry has waited a long time for this study to be updated and we want to be sure we are getting the full picture of the impact of the vast equine industry.’”

The AHC survey is fatally flawed in that it is online and anyone can fill it out.  Therefore, “getting the full picture of the impact of the vast equine industry” is not possible.

The sample is what is called a “convenience sample,” which is typically used for exploratory research and hypotheses formulation rather than to make statistical inferences.  The self-selection and Internet-collection procedure ensure that respondents in total are unrepresentative of the horse-owner (and supplier) population in the United States.  Not all horse owners are computer literate and some unknown percentage who are computer literate will not respond to the survey; it is likely that the majority of horse owners and suppliers to the industry may not even be aware the survey is underway.

In any survey research, far more important than how many people respond is whether the sample is representative so that it can be projected to the larger population from which it is drawn.  Far better to have a random sample of 1,500 U. S. horse owners (and suppliers) than thousands of self-selected respondents to an online survey to achieve what goes by the technical name of “external validity,” or the ability to make generalizations about the larger population.

To demonstrate how mistaken survey results can be if a study is not properly conducted, the AHC research consultants in the 2005 economic-impact study extrapolated from their survey sample that there were between 8.9 million and 9.6 million horses in the U. S., with a midpoint projection of 9.25 million.  Of these, 1.3 million were said to be Thoroughbreds.  [The study was commissioned in 2003 and published in 2005].

Simple calculations prove conclusively that the AHC projection for the number of Thoroughbreds was an actuarial impossibility.  The Jockey Club’s records show that every single Thoroughbred foal born in North America (United States, Canada, and Puerto Rico) from 1969 through 2003 would have had to been alive in 2003 to add up to a population of 1.3 million.  (Annual American imports of Thoroughbred horses were not a factor because historically they represent a relatively small number and are exceeded by exports by a multiple of two or three to one.)

Because of the way the data in the 2017 AHC study were collected, one cannot have any degree of confidence that the findings will even be in the “ballpark.”  Moreover, there is just as good a chance that the economic impact of the U. S. horse industry will be underestimated as overestimated.

Here’s hoping that the AHC will abandon its present methodology and try again with a methodology that will enable it to make defensible and believable projections about the economic impact of the horse industry in the United States.

Copyright © 2017 Horse Racing Business

THE KENTUCKY DERBY: A GIFT THAT KEEPS ON GIVING

When one thinks of the Kentucky Derby, the imagery is of a rite of spring associated with a gala or bash under the Twin Spires of Churchill Downs.  Women and men dressed in fancy attire are sipping mint juleps and betting their money.

The Derby has an elegant character to it but there are other perspectives as well.  Louisville native Hunter S. Thompson in June 1970 penned “The Kentucky Derby is Decadent and Depraved” for Scanlan’s magazine, perhaps aptly describing the doings in the infield at Churchill Downs more so than the clubhouse or grandstand.

But the Kentucky Derby has an entirely different side that is mostly overlooked, having to do with charity and philanthropy.  Kentucky Derby parties are popular across the United States, and many of them are given for the purpose of raising money for good causes.

Recently, I came across a news item in a magazine about how the Society of St. Vincent de Paul in the Cleveland Catholic Diocese had held a Derby party on May 6, 2017 that attracted 170 people and raised $32,000.  In 2016, the Cleveland Society served 39,000 meals to poor people.

After reading the item, I recalled how two years in a row I attended a Kentucky Derby party fundraiser at a private school with the proceeds earmarked for scholarships for worthy students whose parents could not afford tuition.

An Internet search readily turned up plenty of items about Kentucky Derby party fundraisers, such as:

  • “Best 25 Kentucky Derby Fundraiser Ideas” on Pinterest
  • “Boys & Girls Club Fundraiser—Kentucky Derby Theme Party”
  • “Hats and Horses at United Way’s Kentucky Derby Fundraiser”

An article titled “Charity Fundraising Ideas that Rock,” said “…’Kentucky Derby Days’ is a fantastic way to put people in a light-hearted and giving mood.”

Another article pertaining to a 2015 Kentucky Derby-themed fundraiser in Frederick County, Maryland quoted the president of the Frederick County Commission for Women:

“It’s nice…to bring the Kentucky Derby to Frederick.  So what a great way to raise money for a good organization and have a wonderful time, get dressed up, and learn a little bit about the Kentucky Derby and take part in it.”

The Kentucky Derby yields lots of cash to Churchill Downs, Inc., but it also is a potent fundraiser for initiatives that benefit the less fortunate among us year around.  That is largely an untold story.

When the snowflakes fly and Churchill Downs is dormant, money raised from Kentucky Derby charitable events will still be helping needy folks.

Copyright © 2017 Horse Racing Business

CORRUPTION AT PENN NATIONAL RACE COURSE, PART 2

A trainer at Penn National Race Course testified under oath that 95 to 98 percent of the trainers at the racetrack used illegal drugs on their horses within 24 hours of races in which the animals ran.  The trainer said it was well known that laboratory testing was not done for the drugs.

Assume that the trainer was testifying truthfully.  That means that virtually every trainer at Penn National Race Course was flagrantly violating rules and regulations.

Suppose, for purpose of analysis, that you were a Penn National trainer looking for an edge and had no ethical concerns about cheating.  You knew that two drugs were performance-enhancing and that the lab used by the racetrack did not test for them.

A puzzled and inquisitive outsider looking in would ask questions.

First, how did you know that the drugs were performance-enhancing and, second, how did you know that the lab did not test for them?  Who told you these essential pieces of information?

Third, if you knew that administering the drugs would give your horses an advantage, why would you tell other trainers or anyone else?  Since revealing this inside information would compromise your advantage and get you sanctioned and embarrassed if caught, you likely did not divulge your secret.  But then who did?  Was it a representative of the maker of the drugs, or one or more veterinarians, or someone else with a motive to dope horses and collect on bets?

Fourth, if 95 to 98 percent of the trainers knew about and used the illicit drugs, why did the stewards not know?  Would they not hear through the grapevine?

Fifth, is Penn National Race Course an isolated case?  Why did the doping at Penn National not spread to other Pennsylvania racetracks–Parx, Presque Isle Downs, and possibly even harness tracks?  Some of the Penn National trainers even ran horses at the other Thoroughbred racetracks in the Keystone state.

Information flow is highly contagious and thus what was taking place with impunity at Penn National was certainly common knowledge among trainers and vets at Parx and Presque Isle Downs.  Are Parx and Presque Isle Downs models of medication compliance, whereas Penn National is a renegade and an outlier?

Is it believable that Penn National Race Course alone attracted an overwhelming majority of cheating trainers and oblivious stewards?  Was the trainer lying who testified under oath that 95 to 98 percent of the Penn National trainers used illegal drugs on their entries?

Many questions are left unanswered by the Penn National misconduct.

If ever there were a hands-down argument for a federal-sanctioned organization to investigate and prosecute drug violations at American racetracks, it is Penn National Race Course.

The denouement of the Penn National episode is that since almost all the trainers were allegedly using illegal performance-enhancing drugs, little or no competitive advantage was gained by anyone.  Yet the offending trainers and their allies scandalized themselves, the racetrack, and to some extent horse racing.

Copyright © 2017 Horse Racing Business