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Pay and Performance in Baseball: Modeling Regulars, Reserves and Expansion

Fort, Rodney D. and Noll, Roger G. (1984) Pay and Performance in Baseball: Modeling Regulars, Reserves and Expansion. Social Science Working Paper, 527. California Institute of Technology , Pasadena, CA. (Unpublished)

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Although the relationship between pay and performance in baseball has been convincingly demonstrated by Scully, a number of unresolved questions remain. Using a large sample of player salaries from contracts on file at the American League office, new estimates of this relationship are reported. The primary findings are as follows. First, while Scully's basic results are qualitatively robust, the salary elasticities for various performance and experience variables are substantially lower for our sample and specification. Second, for most variables, recent performance, as well as career average, contributes to the explanation of salary differences. Third, expansion has a significant effect on salary structure, and, in our model, makes it statistically invalid to estimate a single salary equation from pooled time-series data that includes an expansion year.

Item Type:Report or Paper (Working Paper)
Group:Social Science Working Papers
Series Name:Social Science Working Paper
Issue or Number:527
Record Number:CaltechAUTHORS:20170919-160534802
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:81597
Deposited By: Jacquelyn Bussone
Deposited On:19 Sep 2017 23:22
Last Modified:03 Oct 2019 18:44

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