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Pay, productivity and aging in Major League Baseball

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  • Turner, Chad
  • Hakes, Jahn

Abstract

Using panels of player pay and performance from Major League Baseball (MLB), we examine trends in player productivity and salaries as players age. Pooling players of all ability levels leads to a systematic bias in regression coefficients. After addressing this problem by dividing players into talent quintiles, we find that the best players peak about two years later than marginal players, and development and depreciation of ability appear to be more pronounced for players with the highest peak ability levels. Within-career variation, however, is less pronounced than between-player variation, and the talent level of players within a given quintile will typically remain lower than the talent level for rookies in the next higher quintile. Free agents are paid proportionately with their production at all ability levels, whereas young players’ salaries are suppressed by similar amounts.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 4326.

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Date of creation: 31 Jul 2007
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Handle: RePEc:pra:mprapa:4326

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Keywords: Major League Baseball (MLB); career dynamics; player salaries and performance; quintile analysis;

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References

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  1. Krohn, Gregor A, 1983. "Measuring the Experience-Productivity Relationship: The Case of Major League Baseball," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(4), pages 273-79, October.
  2. Fair Ray C, 2008. "Estimated Age Effects in Baseball," Journal of Quantitative Analysis in Sports, De Gruyter, vol. 4(1), pages 1-41, January.
  3. Jahn K. Hakes & Raymond D. Sauer, 2006. "An Economic Evaluation of the Moneyball Hypothesis," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 173-186, Summer.
  4. Daniel R. Marburger, 2004. "Arbitrator Compromise in Final Offer Arbitration: Evidence from Major League Baseball," Economic Inquiry, Western Economic Association International, vol. 42(1), pages 60-68, January.
  5. Kahn, Lawrence M, 1993. "Free Agency, Long-Term Contracts and Compensation in Major League Baseball: Estimates from Panel Data," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 157-64, February.
  6. Rob Simmons & David Berri, 2008. "Race and the Evaluation of Signal Callers in the National Football League," IASE Conference Papers 0825, International Association of Sports Economists.
  7. Lawrence M. Kahn, 1991. "Discrimination in professional sports: A survey of the literature," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 44(3), pages 395-418, April.
  8. Scully, Gerald W, 1974. "Pay and Performance in Major League Baseball," American Economic Review, American Economic Association, vol. 64(6), pages 915-30, December.
  9. Brad R. Humphreys, 2000. "Equal Pay on the Hardwood: The Earnings Gap between Male and Female NCAA Division I Basketball Coaches," Journal of Sports Economics, , vol. 1(3), pages 299-307, August.
  10. Kahn, Lawrence M., 2004. "Race, Performance, Pay and Retention among National Basketball Association Head Coaches," IZA Discussion Papers 1120, Institute for the Study of Labor (IZA).
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Cited by:
  1. Turner, Chad & Hakes, Jahn Karl, 2007. "The Collective Bargaining Effects of NBA Player Productivity Dynamics," MPRA Paper 5058, University Library of Munich, Germany.
  2. Jahn K. Hakes & Chad Turner, 2008. "Long-Term Contracts in Major League Baseball," Working Papers 0831, International Association of Sports Economists & North American Association of Sports Economists.
  3. R Simmons & D Berri, 2007. "Does it pay to specialize? The story from the Gridiron," Working Papers 591134, Lancaster University Management School, Economics Department.

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