In by NBAstuffer Team

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What Adjusted Plus-Minus (APM) in brief is:
Over a given time period, the basic plus-minus results are getting adjusted to account for both the teammates and the opponents on the court.

It reflects the impact of each player on his team’s scoring margin after controlling for the strength of every teammate and every opponent during each minute he’s on the court.

Every time segment a player is in a game, adjusted plus-minus tracks:

(1) The other nine players on the floor,
(2) The length of the segment,

(3) The score at the start and at the end of the segment.

How to interpret Adjusted Plus-Minus numbers:
Adjusted +/- ratings indicate how many additional points are contributed to a team’s scoring margin by a given player in comparison to the league-average player whose adjusted +/- value is zero over the span of a typical game. It is assumpted that in a typical game a team has 100 offensive and 100 defensive possessions. For example, if a +6.5 “adjusted +/-” player is on the floor with 4 average teammates, his team will average about 6.5 points better per 100 possessions than 5 average players would.

How are the estimates for Adjusted Plus-Minus calculated?
It’s a matter of finding out the estimates of player variables which produces the smallest difference between expected margin and the actual margin in the matchups. This is how a regression model works, basically.

What are the PROs and CONs for Adjusted Plus-Minus?

PROS:

The biggest advantage of adjusted plus/minus ratings are that they are one of the closest we can come to an unbiased measure of a player’s effectiveness.

CONS:
(1) Adjusted plus/minus ratings are have a high variance. The regression tries to find a constant value for a player, but this value can change pretty dramatically with a different role, a different coaching scheme, different teammates, or different match-ups.

(2) There is noise in the data. For some players, especially when only looking at data over just 1 year, there are some strange results, but that is to be expected. An examination of 239 players revealed that only 7% of the variation in a player’s adjusted plus-minus value in 2008-09 was explained by what he did in 2007-08. Although more data does increase the level of statistical significance, its still the case that most players even when five years of data is employed are not found by this method to have a statistically significant impact.

(3) Another issue which adjusted plus-minus technique struggles to address is the multicollinearity issue. Coaches prefer to use some player duos/trios frequenly or rarely since all players could not be on the court with every other teammate at the same time.