The relationship between payroll and performance disparity in major league baseball: an alternative measure
AbstractThis paper introduces an alternative method of measuring competitive balance in major league baseball and employs it to assess both payroll (talent) disparity and performance (wins) disparity for 30 selected years between 1929 and 2002. Attention is devoted to the impact of two critical events in the evolution of the game: the influx of non-white players and the advent of free agency. The joint effect of these events was to increase payroll disparity while simultaneously reducing performance disparity. A single equation regression model found the effect of payroll disparity on wins disparity in the post free agency period to be positive and significant. The increasing disparity in payrolls since the mid 1990s, particularly in the American League, suggests that the luxury tax has been ineffectual and that greater performance disparity can be expected in the near future.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 12 (2004)
Issue (Month): 9 ()
Contact details of provider:
Find related papers by JEL classification:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rodney Fort & James Quirk, 1995. "Cross-subsidization, Incentives, and Outcomes in Professional Team Sports Leagues," Journal of Economic Literature, American Economic Association, vol. 33(3), pages 1265-1299, September.
- Martin B. Schmidt & David J. Berri, 2003. "On the Evolution of Competitive Balance: The Impact of an Increasing Global Search," Economic Inquiry, Western Economic Association International, vol. 41(4), pages 692-704, October.
- Martin Schmidt & David Berri, 2002. "Competitive Balance and Market Size in Major League Baseball: A Response to Baseball's Blue Ribbon Panel," Review of Industrial Organization, Springer, vol. 21(1), pages 41-54, August.
- Joshua Utt & Rodney Fort, 2002. "Pitfalls to Measuring Competitive Balance With Gini Coefficients," Journal of Sports Economics, , vol. 3(4), pages 367-373, November.
- Simon Rottenberg, 1956. "The Baseball Players' Labor Market," Journal of Political Economy, University of Chicago Press, vol. 64, pages 242.
- Kim, Seungmo & Andrew, Damon P.S., 2013. "Organizational justice in intercollegiate athletics: Perceptions of coaches," Sport Management Review, Elsevier, vol. 16(2), pages 200-210.
- Daniel Mizak & Anthony Stair & John Neral, 2007. "The adjusted churn: an index of competitive balance for sports leagues based on changes in team standings over time," Economics Bulletin, AccessEcon, vol. 26(3), pages 1-7.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John P. Conley).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.