The Value of Major League Baseball Players: An Empirical Analysis of the Baseball Labor Market
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2010
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Haverford College. Department of Economics
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Thesis
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eng
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Open Access
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Abstract
The goal of this thesis was to test the efficiency of the baseball labor market. To analyze the market, I found models to estimate the marginal revenue products of Major League Baseball players. I then compared the estimated marginal revenue products to the actual terms of players’ contracts in the 2009 season. Through this analysis, I was able to find the most over and undervalued players in the 2009 Major League Baseball season. I also was able to identify certain skills that were over or undervalued by the labor market. I noticed considerable differences in market strategy between teams with high payrolls and teams with low payrolls. I was also able to find that players who played above average defense were consistently undervalued.