Leveling the Playing Field or Just Lowering Salaries? The Effects of Redistribution in Baseball

John Solow and Anthony C. Krautmann

Southern Economic Journal, 2007, vol. 73, issue 4, 947-958

Abstract: In an attempt to even the playing field, Major League Baseball has considered a number of different redistribution programs. To successfully address the problem of imbalance in the league, redistribution must affect teams' marginal revenue functions. Previous theoretical work has shown that efforts to redistribute revenues from rich to poor teams will lower the marginal value of winning of all teams, thus reducing the payments to labor. But it remains an empirical question as to whether the net effects of such programs have improved balance. In this paper we provide an empirical assessment of whether redistributive efforts between 1996 and 2001 succeeded in reallocating talent to less advantaged teams by estimating the effect of redistribution on the marginal revenue functions of small‐ and large‐market teams. Our results indicate that redistribution lowered salaries by approximately 22% without affecting league balance.

Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.1002/j.2325-8012.2007.tb00812.x

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:wly:soecon:v:73:y:2007:i:4:p:947-958

Access Statistics for this article

More articles in Southern Economic Journal from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().