An Economic Evaluation of the Moneyball Hypothesis
Jahn K. Hakes and Raymond D. Sauer
|
| Article Citation |
Hakes, Jahn K., and Raymond D. Sauer 2006. "An Economic Evaluation of the Moneyball Hypothesis." Journal of Economic Perspectives, 20(3): 173–186.
DOI:10.1257/jep.20.3.173
|
| Abstract |
Michael Lewis's book, Moneyball, describes how an innovative manager working for the Oakland Athletics successfully exploited an inefficiency in baseball's labor market over a prolonged period of time. We evaluate Lewis's claims by applying standard econometric procedures to data on player productivity and compensation from 1999 to 2004. These methods support Lewis's argument that certain baseball skills were valued inefficiently in the early part of this period, and that this inefficiency was profitably exploited by managers with the ability to generate and interpret statistical knowledge. Consistent with Lewis's story and economic reasoning, as knowledge of the inefficiency became increasingly dispersed across baseball teams the market corrected the original mispricing.
|
| Article Full-Text Access |
|
| JEP Discussion Forum |
View Comments on This Article (0)
| Post A Comment on This Article (AEA Members)
|
| Authors |
Hakes, Jahn K.
Sauer, Raymond D.
|
|
|
|
(pp. 3 - 26)