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Testing the Determinants of Income Distribution in Major League Baseball

Author

Listed:
  • R. Todd Jewell
  • Michael A. McPherson
  • David J. Molina

Abstract

Using data from U.S. Major League Baseball, this article compares parametric and nonparametric Gini coefficients for each team and year. We employ a panel-data model to investigate the time-series and cross-sectional factors affecting the Gini coefficients and the parameters of the preselected distribution. We find that much of within-team income distribution is determined by time-related variables, with the 1994 MLB strike having an especially strong effect. A team's market potential does not seem to affect its salary distribution, but the average age of the players on a team's roster does. Furthermore, inequality first increases with team payroll, then decreases before increasing again. (JEL D31, L83) Copyright 2004, Oxford University Press.

Suggested Citation

  • R. Todd Jewell & Michael A. McPherson & David J. Molina, 2004. "Testing the Determinants of Income Distribution in Major League Baseball," Economic Inquiry, Western Economic Association International, vol. 42(3), pages 469-482, July.
  • Handle: RePEc:oup:ecinqu:v:42:y:2004:i:3:p:469-482
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    File URL: http://hdl.handle.net/10.1093/ei/cbh074
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    Cited by:

    1. Benno Torgler, 2004. "?La Grande Boucle?: Determinants of Success at the Tour de France," CREMA Working Paper Series 2004-22, Center for Research in Economics, Management and the Arts (CREMA), revised May 2005.
    2. 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

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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