High and Inside

An economist’s view of baseball.

Economists are not a timid lot. We like to take our game to other people’s playgrounds and see if we can beat them. We think our game plan—building models based on the assumption that rational people are responding to incentives, crunching a lot of numbers, and ruthlessly sharpening our spikes—can be applied just about everywhere, so we’re not afraid to take road trips. Many find this adventurous bent laudable, although occasionally over-eager economists take on competition that’s pretty tough and the home crowd boos them off the field.

A recent article in the Wall Street Journal told of one such case. When Cornell economist Michael Waldman used statistical evidence to argue that autism is linked to television watching, autism experts and parents of autistic children roundly criticized him and tried to eject him from the ballpark. Or take the case of The Marketplace of Christianity, in which economists Robert B. Ekelund, Jr., Robert F. Hebert, and Robert D. Tollison mangled the religious history of Christianity from the Reformation to the present in a ham-fisted attempt to impose public choice theory and neoclassical economics on spiritual matters. There were a few valuable insights, but overall a lot more misses than hits. And of course there’s the case of Steven D. Levitt, co-author of the surprise bestseller Freakonomics. He’s made news by applying economic arguments and statistical evidence to topics ranging from test taking to naming babies and crime. His argument that the Roe v. Wade decision precipitated a substantial drop in the crime rate a couple decades later is far from what most people once considered to be economics. Serious questions have been raised about the validity of this finding, but the umpiring crew hasn’t yet reached an official ruling.

And now we have economists sizing up sports. Though this may seem trivial to some, perhaps yet another sign of academic decline, the economics of sport is a booming business. My bet is that economists are attracted to analyzing sports primarily because many are enduring sports fans—plus most economists are “stat heads,” and a good many of them spent their youths mentally recalculating their favorite player’s batting average after each of his at bats.

But there’s another reason baseball and economics fit like hand and glove: sports can provide an empirical testing ground for economic theories that may otherwise go untested. This is perhaps the biggest advantage of sports markets, that they make available detailed performance measures for individuals (and their coworkers and managers). Appropriately, undergraduate courses in the economics of sports have popped up at leading research universities like Cornell, Harvard, and Vanderbilt. The Journal of Sports Economics was launched in 2000 and has published nearly 200 articles on sports of all varieties: football, basketball, hockey, golf, racing (foot, horse, bicycle, and auto), boxing, rugby, and even cricket. Topics include player compensation and incentives, league and tournament structures, racial discrimination, the value that consumers put on having a professional team in town, the efficiency of betting markets, the effects of competitive balance on attendance, and the economic impacts of stadium and sports spending. But regardless of what economic issue is being studied, baseball—perhaps because of its sublime essence—is king. More than twice as many studies examine it than the runner-up (soccer).

It’s not surprising, then, that while the sports economics field has sprouted an wide array of monographs (Stephen Shmanske’s Golfonomics, to take just one example), the best of these—such as Andrew Zimbalist’s May the Best Team Win: Baseball Economics and Public Policy, which I’ve discussed with eager students in my Current Economic Issues course—deal with good old American baseball. Out of the dugout and into the lineup steps The Baseball Economist. J. C. Bradbury of Kennesaw State University pitches a slider he calls Sabernomics (coined after Sabermetrics, whose root word comes from SABR—the Society for American Baseball Research—which sprang largely out of the research of the justly revered number-crunching guru Bill James).

What sets Bradbury apart from his competitors is his willingness to apply the tools of economics to the actual strategies of players and managers as the innings unfold. The book opens on the baseball diamond itself. In Chapter 1, for example, Bradbury argues that the price of hitting a batter is not merely that the player gets a free pass to first base, but that there’s likely to be payback. If you bean an opponent, the other team’s pitcher is likelier to bean you or your teammates. This is a conventional interpretation, but Bradbury finds a tractable way to actually test the magnitude of the effect. He draws upon play-by-play data from eight complete seasons (available at www. retrosheet.org) and crunches the numbers, reaching several findings that are consistent with the simple economic insight that hitting batsmen is more likely to occur when the costs are lower.

For example, lousy batters are less likely to be hit—why put on base a guy who will have a tough time earning his way there? Teams who are losing are more likely to plunk the other team, and the larger the run deficit, the greater the likelihood that the pitcher will hit a batter. As the chance of winning a game falls, in other words, the price of plunking, in terms of contributing to a loss, also falls. Finally, pitchers who hit batters in the previous inning are more likely to be hit than those who didn’t hit anyone. The retaliation effect is borne out by the data. Bradbury points out that, ironically, the adoption of the “double warning” rule in 1994—which metes out expulsions, fines, and suspension for subsequent beanings after an umpire determines that a pitcher has intentionally thrown at an opposing player—actually cuts the price of the first beanball in a game and may lead to more hit batsmen, since it ups the price of retaliation. Other chapters that bring economics onto the field provide a cost-benefit test for left-handed catchers, explaining their near extinction, and examine the incentives and payoffs for managers to argue balls and strikes.

Perhaps the most insightful chapter brings us into the locker room, examining the impact of steroids. Bradbury argues that steroids may enhance the quality of the overall baseball product, boosting fans’ willingness to pay and teams’ profits—by leading to more spectacular plays. Yet, steroids have well-known long-term negative side effects on players’ health. Why, then, has their union resisted testing? Bradbury argues that players fear that their urine samples will yield other “health related information,” for example evidence of marijuana use, which he argues is likely to be relatively high among MLB players. He proposes that the players’ union should adopt its own testing policy. The union itself would fine players who use steroids and distribute the fines among the other players—very sensible, since steroid users are imposing costs on other members of the union who must subsequently endanger their own health to keep up with the competition. Keeping testing in house would also protect secrecy about other chemicals deposited by players.

The heart of the book follows the main sports econ basepath in attempting to measure the productivity of baseball pros. But Bradbury reaches extra bases by examining managerial productivity. One thoughtful chapter looks at former Braves pitching coach Leo Mazzone’s success in boosting his squad’s pitching success, concluding that it was substantial.

Bradbury ends where many economists begin, assessing the competitiveness of the professional baseball market and the impact of its anomalous, much-discussed antitrust exemption. He argues, contrary to many other economists, that Major League Baseball doesn’t possess meaningful monopoly power. Rather, MLB is a “contestable market” with no effective barriers to entry. If there were room enough for a second elite professional circuit, it could easily sign players, line up a broadcasting contract, and rent stadiums. However, MLB has learned the lesson of history and has expanded the number of teams whenever such potential entry becomes likely. Unlike a true monopoly, therefore, Major League Baseball has not been able to restrict output—and Bradbury shows that its prices aren’t out of line with other professional sports. Although he overstates his case a bit, he supports it fairly well. MLB’s behavior is strikingly similar to that of the NBA, NHL, and NFL on a host of fronts, so any argument that its anti-trust exemption has a significant impact seems dubious. Moreover, for most fans the substitutes for a baseball game are immensely varied. Baseball is essentially entertainment, and much of its revenue comes from broadcasting, so if teams act as monopolists and charge higher and higher prices only their die-hard fans will be considerably worse off. Those of us who don’t worship the game can—and often do—easily tune out.

Not all of Bradbury’s arguments are as successful. He is too quick to equate maximizing profits with maximizing wins. He essentially assumes that fans pay to see good statistics rather than charismatic stars. His argument that small city teams don’t face much of a disadvantage to big city teams seems dubious, as it ignores the immense cable tv revenue gap.

All in all, though, Bradbury’s book is a major league effort. If it’s not Freakonomics, the Albert Pujols of recent popular economics books, it’s certainly a dependable role player.

Robert Whaples, professor of economics at Wake Forest University, is director and book review editor for EH.Net, which provides electronic services for economic historians.

Copyright © 2007 by the author or Christianity Today/Books & Culture magazine.Click here for reprint information on Books & Culture.

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