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Salary distribution and team performance in Major League Baseball

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  • Christopher N. Annala
  • Jason Winfree

Abstract

This paper presents evidence that payroll inequality within a team is negatively related to on field performance, in terms of team winning percentages in Major League Baseball. This relationship is increasing over time during the sample period and robust to changes in the relationship between payroll and winning. We find strong evidence that, in levels, total team payroll and team specific Gini coefficients are nonstationary. The results also indicate that there exists a structural break in the relationship between payroll, inequality, and winning percent following the strike of 1994–1995.

Suggested Citation

  • Christopher N. Annala & Jason Winfree, 2011. "Salary distribution and team performance in Major League Baseball," Sport Management Review, Taylor & Francis Journals, vol. 14(2), pages 167-175, April.
    • Handle: RePEc:taf:rsmrxx:v:14:y:2011:i:2:p:167-175
    DOI: 10.1016/j.smr.2010.08.002
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    Cited by:

    1. Bonache, Jaime & Zárraga-Oberty, Celia, 2020. "Compensating international mobility in a workers’ cooperative: An interpretive study," Journal of World Business, Elsevier, vol. 55(5).
    2. Deepak Srivastav & Puram Praveen & Rudra Sensarma & Anand Gurumurthy, 2021. "Does salary dispersion affect team performance in cricket? Evidence from the Indian Premier League," Working papers 441, Indian Institute of Management Kozhikode.
    3. António Sérgio Ribeiro & Francisco Lima & Sascha Kraus & Ferran Calabuig, 2022. "Tournaments within football teams: players’ performance and wages," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 35(1), pages 4884-4901, December.
    4. Robert Killins, 2017. "The impact of payroll allocation has on winning in major league baseball," Applied Economics Letters, Taylor & Francis Journals, vol. 24(16), pages 1189-1193, September.
    5. Ajay Sharma, 2025. "Impact of three-point rule change on competitive balance in football: a synthetic control method approach," Applied Economics, Taylor & Francis Journals, vol. 57(55), pages 9264-9274, November.
    6. Takuma Kamada & Hajime Katayama, 2014. "Team performance and within-team salary disparity: an analysis of nippon professional baseball," Economics Bulletin, AccessEcon, vol. 34(1), pages 144-151.
    7. 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.
    8. Carlo Bellavite Pellegrini & Raul Caruso & Marco Di Domizio, 2021. "Relative wages, payroll structure and performance in soccer. Evidence from Italian Serie A (2007-2019)," DISCE - Working Papers del Dipartimento di Politica Economica dipe0015, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    9. 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.
    10. Marco Di Domizio & Carlo Bellavite Pellegrini & Raul Caruso, 2022. "Payroll dispersion and performance in soccer: A seasonal perspective analysis for Italian Serie A (2007–2021)," Contemporary Economic Policy, Western Economic Association International, vol. 40(3), pages 513-525, July.
    11. Murat ÇİFTÇİ, 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, March.

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