IDEAS home Printed from https://ideas.repec.org/a/ags/reapec/143466.html

The Determinants of Annual Earnings for PGA Players Under the New PGA’s FedEx Cup System

Author

Listed:
  • Ohn, Jonathan K.
  • Bealing, William
  • Waeger, Dan

Abstract

There have been numerous studies that examined the earnings determination of Major League Baseball (MLB) and National Football League (NFL) professional athletes, but relatively little attention has been paid to the earnings determination of professional golfers. The important difference between the two is: the earnings of MLB and NFL athletes are determined by past and expected future performance, while the earnings of professional golfers depend strictly on their current performance. In this paper, we reexamine the structure and determination of the PGA golfers’ tour earnings in the new era, which started with the introduction of the FedEx Cup Championship in 2007. We use two determination models – the first with a set of traditional skill variables, and the second with the skill variables along with two additional variables which reflect the monetary and psychological effect of a player’s timely performance at the majors, and the measure of a player’s consistency and persistency throughout the regular season. Overall, the second model appears to be a superior model, explaining the earnings determination of PGA players better.

Suggested Citation

  • Ohn, Jonathan K. & Bealing, William & Waeger, Dan, 2012. "The Determinants of Annual Earnings for PGA Players Under the New PGA’s FedEx Cup System," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 8(01), pages 1-11, May.
    • Handle: RePEc:ags:reapec:143466
    DOI: 10.22004/ag.econ.143466
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/143466/files/7-Jonathan%20K.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.143466?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Orszag, Jonathan M., 1994. "A new look at incentive effects and golf tournaments," Economics Letters, Elsevier, vol. 46(1), pages 77-88, September.
    2. Peter Nero, 2001. "Relative Salary Efficiency of Pga Tour Golfers," The American Economist, Sage Publications, vol. 45(2), pages 51-56, October.
    3. Paul M. Sommers & Noel Quinton, 1982. "Pay and Performance in Major League Baseball: The Case of the First Family of Free Agents," Journal of Human Resources, University of Wisconsin Press, vol. 17(3), pages 426-436.
    4. Ehrenberg, Ronald G & Bognanno, Michael L, 1990. "Do Tournaments Have Incentive Effects?," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1307-1324, December.
    5. Ronald L. Moy & Thomas Liaw, 1998. "Determinants of Professional Golf Tournament Earnings," The American Economist, Sage Publications, vol. 42(1), pages 65-70, March.
    6. Charles E. Zech, 1981. "An Empirical Estimation of a Production Function: The Case of Major League Baseball," The American Economist, Sage Publications, vol. 25(2), pages 19-23, October.
    7. Scully, Gerald W, 1974. "Pay and Performance in Major League Baseball," American Economic Review, American Economic Association, vol. 64(6), pages 915-930, December.
    8. Mark Gius & Donn Johnson, 2000. "Race and compensation in professional football," Applied Economics Letters, Taylor & Francis Journals, vol. 7(2), pages 73-75.
    9. Cade Massey & Richard Thaler, 2005. "Overconfidence vs. Market Efficiency in the National Football League," NBER Working Papers 11270, National Bureau of Economic Research, Inc.
    10. Lawrence M. Kahn, 1992. "The Effects of Race on Professional Football Players' Compensation," ILR Review, Cornell University, ILR School, vol. 45(2), pages 295-310, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lawrence M. Kahn, 2000. "The Sports Business as a Labor Market Laboratory," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 75-94, Summer.
    2. Stephen Shmanske, 2007. "Consistency or Heroics: Skewness, Performance, and Earnings on the PGA TOUR," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 35(4), pages 463-471, December.
    3. Benno Torgler & Markus Schaffner & Bruno S. Frey & Sascha L. Schmidt, 2008. "Looking Awkward When Winning and Foolish When Losing: Inequity Aversion and Performance in the Field," IEW - Working Papers 369, Institute for Empirical Research in Economics - University of Zurich.
    4. Thomas H. Bruggink, 1993. "National Pastime to Dismal Science: Using Baseball to Illustrate Economic Principles," Eastern Economic Journal, Eastern Economic Association, vol. 19(3), pages 275-294, Summer.
    5. Pelnar, Gregory, 2007. "Antitrust Analysis of Sports Leagues," MPRA Paper 5382, University Library of Munich, Germany.
    6. Benno Torgler & Markus Schaffner & Bruno S. Frey & Sascha L. Schmidt & Uwe Dulleck, 2008. "Inequality Aversion and Performance in and on the Field," CREMA Working Paper Series 2008-18, Center for Research in Economics, Management and the Arts (CREMA).
    7. Thomas A. Rhoads, 2007. "Labor Supply on the PGA TOUR," Journal of Sports Economics, , vol. 8(1), pages 83-98, February.
    8. David J. Berri & Rob Simmons, 2009. "Race and the Evaluation of Signal Callers in the National Football League," Journal of Sports Economics, , vol. 10(1), pages 23-43, February.
    9. Kendall Weir & Stephen Wu, 2014. "Criminal Records and the Labor Market for Professional Athletes," Journal of Sports Economics, , vol. 15(6), pages 617-635, December.
    10. Benno Torgler & Markus Schaffner & Sascha L. Schmidt & Bruno S. Frey, 2008. "Do Employees Care about their Relative Position? Behavioural Evidence Focusing on Performance," CREMA Working Paper Series 2008-12, Center for Research in Economics, Management and the Arts (CREMA).
    11. Scott J. Callan & Janet M. Thomas, 2007. "Modeling the Determinants of a Professional Golfer's Tournament Earnings," Journal of Sports Economics, , vol. 8(4), pages 394-411, August.
    12. Brad Humphreys & Bernd Frick, 2019. "Prize Structure and Performance: Evidence from NASCAR," Economies, MDPI, vol. 7(4), pages 1-13, October.
    13. Benjamin Leard & Joanne M. Doyle, 2011. "The Effect of Home Advantage, Momentum, and Fighting on Winning in the National Hockey League," Journal of Sports Economics, , vol. 12(5), pages 538-560, October.
    14. John List & Daan Van Soest & Jan Stoop & Haiwen Zhou, 2014. "On the Role of Group Size in Tournaments: Theory and Evidence from Lab and Field Experiments," NBER Working Papers 20008, National Bureau of Economic Research, Inc.
    15. Torbern Anderson & Sumner J. La Croix, 1989. "Minority Pitchers in Major League Baseball: Is There Discrimination by Fans?," Working Papers 198913, University of Hawaii at Manoa, Department of Economics.
    16. repec:lan:wpaper:3964 is not listed on IDEAS
    17. Wolfgang Maennig & Viktoria C. E. Schumann, 2022. "Prevention Effect of News Shocks in Anti-Doping Policies," Journal of Sports Economics, , vol. 23(4), pages 431-459, May.
    18. Kerry L. Papps, 2020. "Sports at the vanguard of labor market policy," IZA World of Labor, LISER, pages 481-481, October.
    19. Thierry Lallemand & Robert Plasman & François Rycx, 2008. "Women and Competition in Elimination Tournaments," Journal of Sports Economics, , vol. 9(1), pages 3-19, February.
    20. John D. Burger & Stephen J. K. Walters, 2008. "The Existence and Persistence of a Winner's Curse: New Evidence from the (Baseball) Field," Southern Economic Journal, John Wiley & Sons, vol. 75(1), pages 232-245, July.
    21. David J. Berri & Brad R. Humphreys & Robert Simmons, 2013. "Valuing the blind side: pay and performance of offensive linemen in the National Football League," Chapters, in: Plácido Rodríguez & Stefan Késenne & Jaume García (ed.), The Econometrics of Sport, chapter 6, pages 99-114, Edward Elgar Publishing.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:reapec:143466. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aelinnz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.