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.

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