The price of efficiency: examining the effects of payroll efficiency on Major League Baseball attendance

Colin Santos Regan

Applied Economics Letters, 2012, vol. 19, issue 11, 1007-1015

Abstract: From 1998 to 2008, the Oakland Athletics were the most payroll efficient team in Major League Baseball (MLB), recording the 5th highest win percentage despite having the 7th lowest payroll to work with. Their remarkable success has been widely attributed to the innovative strategies employed by general manager Billy Beane designed to identify undervalued statistics and players. However, these strategies also had the unintended effect of diminishing fan interest. An estimated 1600 fans per game were lost as a result of these payroll efficiency strategies, which produce teams composed of young, relatively unknown players and game tactics perceived as less exciting than more traditional approaches.

Date: 2012
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DOI: 10.1080/13504851.2011.610735

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