Does Salary Affect Performance In Professional Baseball?
Abstract
Baseball is unlike most other professional sports in this country, in that it does not have a maximum salary that can be paid to a player. Therefore there are massive incentives to play well and increase your overall skill level over time. Society demonstrates the principle that ÒYou get what you pay forÓ but does this hold true in Major League Baseball? In other words, is their causation between pay and performance? Based on economic theory, I expect to find a reasonably strong correlation between the pay and performance of Major League Baseball Players. By accumulating credible statistics on MLB salary and overall player performance indicators from a variety of publicly available data sources I was able to run a regression analysis with the dependent variable being performance and the key independent variable being salary. In order to increase the accuracy of this study, salary data will be collected from as far back as the beginning of the Ômodern baseball era' (i.e. it is the near exact game played today). Data is inflation adjusted and then transposed against a series of all encompassing player performance statistics.
Session Name:
Sports Economics
Start Date
10-4-2015 9:00 AM
End Date
10-4-2015 10:00 AM
Location
HSB 300
Does Salary Affect Performance In Professional Baseball?
HSB 300
Baseball is unlike most other professional sports in this country, in that it does not have a maximum salary that can be paid to a player. Therefore there are massive incentives to play well and increase your overall skill level over time. Society demonstrates the principle that ÒYou get what you pay forÓ but does this hold true in Major League Baseball? In other words, is their causation between pay and performance? Based on economic theory, I expect to find a reasonably strong correlation between the pay and performance of Major League Baseball Players. By accumulating credible statistics on MLB salary and overall player performance indicators from a variety of publicly available data sources I was able to run a regression analysis with the dependent variable being performance and the key independent variable being salary. In order to increase the accuracy of this study, salary data will be collected from as far back as the beginning of the Ômodern baseball era' (i.e. it is the near exact game played today). Data is inflation adjusted and then transposed against a series of all encompassing player performance statistics.