n_huffhines
What's it gonna cost?
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- Mar 11, 2009
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Beane is the biggest joke in all sports management.
I don't get this. He basically revolutionized baseball by popularizing OBP over AVG.
we thought there was a decent chance that we could refute the economic claims in Moneyball, in particular that players with high OBP were under-priced in the labor market. Any card-carrying economist knows this is inconsistent with equilibrium in a well-functioning, competitive labor market, and were not baseball teams intensely competitive? But instead, Jahn and I found that high OBP players did come cheap, relative to the contribution of their skill to winning baseball games. Intriguingly however, we found that the OBP discount vanished in 2004, the year that Moneyball was published. The likely reason: other teams, like Michael Lewis, had looked into what was going on in Oakland, and hired people out of the As front office. Now there were multiple bidders for high-OBP players in baseballs labor market, thus driving up their price.
The multiple bidder story seemed a plausible conjecture, and Hakes and I wanted to look deeper into it. This resulted in our second paper on the topic, which had several goals. First, we wanted to know if the mis-pricing was of short or long duration. We extended our sample back to the mid-1980s, and found that high OBP players were under-priced for the entire 1986-2003 period. Second, the 2004 correction was sustained in the subsequent two seasons. It was not a mirage. Finally, we separated walks from base hits in the OBP statistic, to further refine our sense of the source of the mis-pricing. We found the source of the mis-pricing lay in plate discipline, i.e. the ability to avoid swinging at bad pitches and accept taking a walk. Moreover, the changes in the returns to plate discipline over the entire period were huge. Compare two figures. In the early, pre-expansion period of 1986-1993, the estimated percentage boost in salary from a one standard deviation increase in the ability to take walks was a measly 2.8%. Post-Moneyball, the figure was 14.0%. The financial returns to the overlooked skill increased by a factor of five.
The Return of Moneyball | The Sports Economist