Document Type
Article
Publication Date
9-2014
Publication Title
Eastern Economic Journal
Abstract
Among the central arguments of the bestselling book and movie Moneyball was the allegation that the labor market for baseball players was inefficient in 2002. At that time, Billy Beane and the Oakland Athletics used observations made by statistical analysts to exploit this market inefficiency, and acquire productive players on the cheap. Econometric analysis published in 2006 and 2007 confirmed the presence of an inefficient market for baseball players, but left open the question of to what extent, and how quickly, a market correction would occur. We find that this market had in fact already corrected by 2006, and moreover argue that the perceived market response to Moneyball in 2004 is properly viewed as part of a more gradual longer-term trend. In addition, we use official payroll data from Major League Baseball to refute a previous observation that the relationship between team payroll and performance has tightened since the publication of Moneyball.
Keywords
baseball, sabermetrics, market inefficiencies, labor markets, statistical modeling
Volume
40
Issue
4
First Page
488
Last Page
498
DOI
doi.org/10.1057/eej.2013.43
Rights
Licensed to Smith College and distributed CC-BY under the Smith College Faculty Open Access Policy.
Recommended Citation
Baumer, Benjamin and Zimbalist, Andrew, "Quantifying Market Inefficiencies in the Baseball Players’ Market" (2014). Mathematics Sciences: Faculty Publications, Smith College, Northampton, MA.
https://scholarworks.smith.edu/mth_facpubs/24
Comments
Author’s submitted manuscript.