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The Impact of Team Revenues on MLB Salaries

Author

Listed:
  • Kenneth H. Brown

    (University of Northern Iowa)

  • Lisa K. Jepsen

    (University of Northern Iowa, Lisa.Jepsen@uni.edu)

Abstract

We test which individual major league baseball (MLB) player characteristics, such as on-base and slugging percentages, predict a hitter's salary. We also consider whether some MLB teams pay more per individual characteristic than others by using a hierarchical linear model to allow the value that a team places on a player characteristic to vary across teams. We find that offensive statistics are key determinants of player salaries but that teams do not pay differently for them. There are team differences, however, in the salaries received by players who are eligible for arbitration.

Suggested Citation

  • Kenneth H. Brown & Lisa K. Jepsen, 2009. "The Impact of Team Revenues on MLB Salaries," Journal of Sports Economics, , vol. 10(2), pages 192-203, April.
    • Handle: RePEc:sae:jospec:v:10:y:2009:i:2:p:192-203
    DOI: 10.1177/1527002508329858
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    References listed on IDEAS

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    Cited by:

    1. James Alm & William H. Kaempfer & Edward Batte Sennoga, 2012. "Baseball Salaries and Income Taxes," Journal of Sports Economics, , vol. 13(6), pages 619-634, December.
    2. Rockerbie, Duane W, 2010. "Marginal revenue product and salaries: Moneyball redux," MPRA Paper 21410, University Library of Munich, Germany.
    3. James Alm & William H. Kaempfer & Edward Batte Sennoga, 2012. "Baseball Salaries and Income Taxes: The "Home Field Advantage" of Income Taxes on Free Agent Salaries," Working Papers 1209, Tulane University, Department of Economics.
    4. Rockerbie, Duane & Easton, Stephen, 2019. "A Real Options Approach to Multi-Year Contracts in Professional Sports," MPRA Paper 93062, University Library of Munich, Germany.

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    Keywords

    HLM models; sports; baseball; salary;
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