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The influence of free-agent filing on MLB player performance.

Major League Baseball players who file for free agency are motivated to put together a good season before they file (known as their "contract year"). This brief note examines their performance in the years before and after their free-agent filings.

Of the 210 baseball players who filed for free agency at the end of the 2003 season [The Sporting News 2004 Baseball Guide, p. 229], 88 hitters and 75 pitchers returned the following season. They were divided into three age groups of roughly equal size: (1) 32 years of age or younger as of April 1, 2004; (2) 33, 34, or 35 years of age; and (3) over 35 years of age. For each of the three age groups, hitters' on-base percentage plus slugging average (OPS) and pitchers' walks plus hits divided by innings pitched (WHIP) in 2003 were compared to the seasons before and after the players filed for free agency. All performance data are from The Sporting News 2005 Baseball Register.

Among hitters, OPS increased (and hence performance improved) in the contract year over the season before for all but the oldest age group, although none of the changes was statistically significant. However, OPS decreased (and hence performance declined) for all three age groups in the season after the contract year: (1) youngest (n = 25), .745 to .707 (p = .21); (2) middle (n = 31), .727 to .648 (p = .013); and (3) oldest (n = 32), .762 to .724 (p = .07).

Among pitchers, WHIP decreased (and, hence, performance improved) in the contract year over the season before for all but the oldest age group, although none of the changes was statistically significant. However, WHIP increased (and hence performance declined) for all three age groups in the season after the contract year: (1) youngest (n = 29), 1.36 to 1.39 (p = .61); (2) middle (n = 23), 1.33 to 1.52 (p < .001); and (3) oldest (n = 23), 1.39 to 1.55 (p = .23).

The paired t-tests for both hitters and pitchers show uniformly lower (and, in some cases, significantly lower) performance levels one season after filing for free agency compared to those in the contract year. The youngest players exhibit the smallest decline, largely because they (unlike their older counterparts) will have the opportunity to sign another contract before they retire. Similar results were obtained using other common measures of player performance (slugging averages for hitters and earned run averages for pitchers). If individuals work harder their contract year (and less hard the years after), then management has an incentive to sign players to shorter contracts. (JEL J41, L83)

EVAN C. HOLDEN AND PAUL M. SOMMERS *

* Middlebury College--U.S.A.

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Title Annotation:ANTHOLOGY
Author:Holden, Evan C.; Sommers, Paul M.
Publication:Atlantic Economic Journal
Geographic Code:1USA
Date:Dec 1, 2005
Words:442
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