IDEAS home Printed from https://ideas.repec.org/a/sej/ancoec/v734y2007p947-958.html
   My bibliography  Save this article

Leveling the Playing Field or Just Lowering Salaries? The Effects of Redistribution in Baseball

Author

Listed:
  • John L. Solow

    () (Department of Economics, University of Iowa)

  • Anthony C. Krautmann

    () (Department of Economics, DePaul University)

Abstract

In an attempt to even the playing field, Major League Baseball has considered a number of different redistribution programs. To successfully address the problem of imbalance in the league, redistribution must affect teams' marginal revenue functions. Previous theoretical work has shown that efforts to redistribute revenues from rich to poor teams will lower the marginal value of winning of all teams, thus reducing the payments to labor. But it remains an empirical question as to whether the net effects of such programs have improved balance. In this paper we provide an empirical assessment of whether redistributive efforts between 1996 and 2001 succeeded in reallocating talent to less advantaged teams by estimating the effect of redistribution on the marginal revenue functions of small- and large-market teams. Our results indicate that redistribution lowered salaries by approximately 22% without affecting league balance.

Suggested Citation

  • John L. Solow & Anthony C. Krautmann, 2007. "Leveling the Playing Field or Just Lowering Salaries? The Effects of Redistribution in Baseball," Southern Economic Journal, Southern Economic Association, vol. 73(4), pages 947-958, April.
  • Handle: RePEc:sej:ancoec:v:73:4:y:2007:p:947-958
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Richard Cebula, 2013. "A panel data analysis of the impacts of regional economic factors, marketing and promotions, and team performance on minor league baseball attendance," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(3), pages 695-710, December.
    2. Rockerbie, Duane W, 2012. "Exploring inter-league parity in North America: the NBA anomaly," MPRA Paper 43088, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

    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:sej:ancoec:v:73:4:y:2007:p:947-958. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laura Razzolini). General contact details of provider: http://edirc.repec.org/data/seaaaea.html .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.