The invariance principle in baseball: new evidence

Duane Rockerbie

Applied Economics, 2018, vol. 50, issue 23, 2613-2621

Abstract: This article considers the change in revenue sharing in Major League Baseball that occurred prior to the 2007 season and its effects on parity via its effects on marginal revenues. Based on the results from an empirical specification for team revenue, we find evidence that the reduction in revenue sharing increased marginal revenue by more for large market clubs than for small market clubs, despite holding constant other differences in how small and large market club revenues are determined. The upshot of this result is that the modest reduction in revenue sharing could have worsened league parity by 11 to 17 points in winning percentage between small and large market clubs, although other factors affect parity as well. The well-known invariance principle in the economics of sport literature does not appear to hold; however, the current consensus of theoretical models is not confirmed.

Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2017.1403561 (text/html)
Access to full text is restricted to subscribers.

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:taf:applec:v:50:y:2018:i:23:p:2613-2621

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2017.1403561

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().