Salary Inequality and Performance in MLB
Salary Inequality and Performance in MLB
Introduction/Overview: This paper will explore the effect of team chemistry on performance in Major League Baseball (MLB). In the 2000s, the Yankees were a team of great individual talent, however, their lack of team unity was noticeable. In the playoffs, when heart, guts, and team chemistry matter greatly, the Yankees fell short and were easily eliminated each year. It wasn’t until 2009, when the Yankees acquired jokester Nick Swisher, prankster AJ Burnett, and fun loving C.C. Sabathia that the chemistry of the team improved drastically. Shaving cream pies to the faces of players who got the game winning hit, and various other team pranks became the norm in the once tense Yankee clubhouse. They finally seemed to enjoy the company of each other and it resulted in their first World Championship in nine years. This paper will not analyze championships; nevertheless, it is clear that team chemistry has a significant positive effect on team performance. The issue is quantifying team chemistry.
I postulated that the more equally distributed a team’s salary was, the better the players would get along. It seems probable that a team of five big ego-ed stars with big salaries and twenty players paid minimum wage (rookies or over the hill veterans) would have less chemistry than a team of twenty-five players of equal salary (and equal egos). I thus hypothesize that the more equal a team’s salary is distributed, the better it will perform. If this study is able to show that salary inequality has an injurious effect on team performance in MLB, General Managers should work on lowering team payroll inequality in order to promote team chemistry. The remainder of this paper will review past relevant studies to give perspective, explain the theoretical model, define and give expected signs to the variables, explain the data, and analyze the regression results.
Past Research: Mark Foley and Fred Smith of
Introduction/Overview: This paper will explore the effect of team chemistry on performance in Major League Baseball (MLB). In the 2000s, the Yankees were a team of great individual talent, however, their lack of team unity was noticeable. In the playoffs, when heart, guts, and team chemistry matter greatly, the Yankees fell short and were easily eliminated each year. It wasn’t until 2009, when the Yankees acquired jokester Nick Swisher, prankster AJ Burnett, and fun loving C.C. Sabathia that the chemistry of the team improved drastically. Shaving cream pies to the faces of players who got the game winning hit, and various other team pranks became the norm in the once tense Yankee clubhouse. They finally seemed to enjoy the company of each other and it resulted in their first World Championship in nine years. This paper will not analyze championships; nevertheless, it is clear that team chemistry has a significant positive effect on team performance. The issue is quantifying team chemistry.
I postulated that the more equally distributed a team’s salary was, the better the players would get along. It seems probable that a team of five big ego-ed stars with big salaries and twenty players paid minimum wage (rookies or over the hill veterans) would have less chemistry than a team of twenty-five players of equal salary (and equal egos). I thus hypothesize that the more equal a team’s salary is distributed, the better it will perform. If this study is able to show that salary inequality has an injurious effect on team performance in MLB, General Managers should work on lowering team payroll inequality in order to promote team chemistry. The remainder of this paper will review past relevant studies to give perspective, explain the theoretical model, define and give expected signs to the variables, explain the data, and analyze the regression results.
Past Research: Mark Foley and Fred Smith of
Cited: Akerlof, George and Janet Yellen (1990), “The Fair Wage-Effort Hypothesis and Unemployment,” Quarterly Journal of Economics, vol. 105, no. 2, May. Edward P Heyman, Fredrik. "Pay Inequality and Firm Performance: Evidence from Matched Employer-Employee Data ." FIEF Working Paper Series 2002 (2002): 31-41. Web. 15 Apr 2010. <http://swopec.hhs.se/fiefwp/papers/WP186.pdf> Jewell, Todd, and David Molina Lewis, Michael. Moneyball. New York: W. W. Norton & Company Inc., 2003. "MLB Team Stats." ESPN Sommer, Paul, and Brandon Avrutin. "Work Incentives and Salary Distributions in Major League Baseball." Atlantic Economic Journal. 35.4 (2007): 509-510. Print. "USA Today Salaries Databases." USA Today. N.p., 2010. Web. 16 Apr 2010.<http://content.usatoday.com/sports/baseball/salaries/teamdetail.aspx?year=2009&team=9>.