Estimating Baseball Salary Equations from 1961-2005: A Look at Changes in Major League Compensation

Gary Stone () and Louis Pantuosco ()
Additional contact information
Gary Stone: Winthrop University
Louis Pantuosco: Winthrop University

International Journal of Sport Finance, 2008, vol. 3, issue 4, 228-238

Abstract: This study estimates Major League Baseball (MLB) player salaries for three distinct periods of time. The data from the first time period, 1961 through 1973, were collected in 1974, but analysis of that set has never been published. During that period the reserve clause was fully in effect. The second period, 1974 through 1983, captures the early years of arbitration and free agency. The third period, 1999 through 2005, represents the modern era. The estimates specify that the salary productivity elasticities have increased over time for slugging average, player durability, and player consistency; this result indicates that over time owners have placed more value on these measures of player productivity. The model also implies that teams located in more densely populated areas are better able to compensate their players, particularly their pitchers. We conclude that our model explains salaries well in the 1961-1973 and 1999-2005 periods, but the regression estimates reveal a less pronounced relationship between the marginal revenue product and MLB wages in the early years of arbitration and free agency (1974-1983).

Keywords: labor; sports; wages; productivity; market structure; Major League Baseball (search for similar items in EconPapers)
JEL-codes: L83 (search for similar items in EconPapers)
Date: 2008
References: Add references at CitEc
Citations:

Downloads: (external link)
http://wvuecommerce.wvu.edu/index.cfm?do=product.p ... id=70&sub_cat_id=520 (text/html)
Full-text download requires subscription from FIT.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jsf:intjsf:v:3:y:2008:i:4:p:228-238

Ordering information: This journal article can be ordered from
http://www.fitinfote ... IJSFbackissueWVU.tpl

Access Statistics for this article

International Journal of Sport Finance is currently edited by Arne Feddersen, Babatunde Buraimo, Joachim Prinz and Jane Ruseski

More articles in International Journal of Sport Finance from Fitness Information Technology
Bibliographic data for series maintained by Victor Matheson ().