J.C. Bradbury is an economist and associate professor at Kennesaw State University in metropolitan Atlanta. He is the author of The Baseball Economist and has operated the website Sabernomics since March 2004.
My dad liked baseball. Though he didn't watch it much, he used to tell me stories about playing Little League and going to Yankee Stadium. All the kids in my neighborhood played baseball, so I played too. It was one of the few sports where I was one of the better players, so that helped. Making my Little League All-Star team and having a multi-homer game are fond memories.
The economic aspect that interests most observers is the size of the contracts that players earn. Players earn millions of dollars for the same reason that movie stars earn even more millions: many people are willing to devote a portion of their incomes to watch them perform. As the market for baseball has expanded, so have player salaries. Because few non-baseball players earn that type of money, it's difficult to justify these high salaries. But, the salaries players earn are in line with the revenues they generate for their teams through ticket sales, concessions, advertising, etc.
There are some great examples from in-game play. The important concept of opportunity cost, which is that the cost of any choice is the forgone value of the next highest alternative, is easy to see in many parts of the game. For example, it's easy to see the cost of getting caught stealing. You give up a runner on the bases plus an out. Does this mean that you should never steal? No, because the cost of not stealing is the potential benefit of making it to the next base safely. There is no such thing as a costless choice!
Well, it's not just how much you pay players, but how you use them. It's a resource allocation problem. I think it's a big reason why teams have gone larger pitching staffs. Rather than having a few decent relievers throw several innings, teams have been asking poor-to-mediocre relievers to throw one inning or less with all that they have. Platooning players is another economic decision: two lesser hitters who only hit only against opposite-handed pitchers can be more valuable than an everyday player who hits against both lefties and righties.
It's hard to say. Big-market teams are always going to have an advantage over small-market teams, but I don't think the advantage is so great that it does damage to the game that we could fix with a simple institutional fix (like a salary cap). As a whole, I think all teams will suffer some, but major sports have been less sensitive to recesssions than other economic sectors. It's relatively cheap entertainment for customers who are fanatically loyal.
My favorite players have yet to make it. My favorite players have been Dale Murphy, Chipper Jones, Jim Thome, and Mike Piazza. I think the latter three will make it, but it looks like Murph is going to fall short.
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