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Team payroll and team performance in major league baseball: 1985-2002


  • Frederick Wiseman

    () (Northeastern University)

  • Sangit Chatterjee

    () (Northeastern University)


This paper examines the relationship between team payroll and team performance in major league baseball from 1985 to 2002. The results indicate that the relationship has changed over time. Unlike the early years, there is now a much clearer relationship between payroll and performance. Specifically, in the latter part of the 1990s and continuing into the 21st century, the greater the team payroll and the more equally this payroll is distributed among team members, the better the on-field performance of the team. This is a problem of particular concern because of the growing disparity in team payrolls which, in turn, affects the competitive balance of the sport. This growing disparity was also at the heart of last year's contract negotiations between players and owners.

Suggested Citation

  • Frederick Wiseman & Sangit Chatterjee, 2003. "Team payroll and team performance in major league baseball: 1985-2002," Economics Bulletin, AccessEcon, vol. 1(2), pages 1-10.
  • Handle: RePEc:ebl:ecbull:eb-03a10003

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    References listed on IDEAS

    1. Martin B. Schmidt & David J. Berri, 2001. "Competitive Balance and Attendance," Journal of Sports Economics, , vol. 2(2), pages 145-167, May.
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    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. Inequality and Team Performance
      by Arnold Kling in askblog on 2015-12-28 18:22:22


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    Cited by:

    1. Tao, Yu-Li & Chuang, Hwei-Lin & Lin, Eric S., 2016. "Compensation and performance in Major League Baseball: Evidence from salary dispersion and team performance," International Review of Economics & Finance, Elsevier, vol. 43(C), pages 151-159.
    2. Leo Kahane & Neil Longley & Robert Simmons, 2013. "The Effects of Coworker Heterogeneity on Firm-Level Output: Assessing the Impacts of Cultural and Language Diversity in the National Hockey League," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 302-314, March.
    3. repec:lan:wpaper:3951 is not listed on IDEAS
    4. Xing Lu & Jason Matthews & Miao Wang & Hong Zhuang, 2018. "Team payroll, pitcher and hitter payrolls and team performance: Evidence from the U.S. Major League Baseball," Economics and Business Letters, Oviedo University Press, vol. 7(2), pages 62-69.
    5. Fix, Blair, 2019. "An Evolutionary Theory of Resource Distribution," EconStor Open Access Articles, ZBW - Leibniz Information Centre for Economics, pages 65-97.
    6. repec:lan:wpaper:3666 is not listed on IDEAS
    7. Jye-Shyan Wang & Chih-Fu Cheng & Wen-Jhan Jane, 2014. "Buying success or redistributing payment: bidirectional causality in Korean Professional Baseball League," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 4(2), pages 247-260, December.
    8. Rockerbie, Duane, 2011. "The Invariance Proposition in Baseball: New Evidence," MPRA Paper 55020, University Library of Munich, Germany.
    9. Alessandro Bucciol & Nicolai J Foss & Marco Piovesan, 2014. "Pay Dispersion and Performance in Teams," PLOS ONE, Public Library of Science, vol. 9(11), pages 1-16, November.
    10. Caruso, Raul & Carlo, Bellavite Pellegrini & Marco, Di Domizio, 2016. "Does diversity in the payroll affect soccer teams’ performance? Evidence from the Italian Serie A," MPRA Paper 75644, University Library of Munich, Germany.
    11. Murat Çiftçi, 2015. "Regional Inequality of Sport Facilities in Turkey," Eurasian Academy Of Sciences Social Sciences Journal, Eurasian Academy Of Sciences, vol. 4(4), pages 49-66, July.
    12. Annala, Christopher N. & Winfree, Jason, 2011. "Salary distribution and team performance in Major League Baseball," Sport Management Review, Elsevier, vol. 14(2), pages 167-175, May.

    More about this item


    Competitive balance Gini coefficient Perforamnce Salary structure Major League Baseball;

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics


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