Wednesday, May 16, 2012

NHL Pay and Performance

Last month I looked a pay and performance in the NHL for just the 2011-2012 season. As I mention in the blog, that is a rather small sample. So to correct for this sample size problem, let's take a look over a longer period of time; from the 2000-2001 regular season to the 2011-2012 regular season (no 2004-2005 as this was the cancelled NHL season).  I am following the same payroll and performance analysis that I blogged about with regard to Major League Baseball for this NHL study.

For the eleven seasons covered, relative payroll is positive and statistically significant, which is expected.  On the other hand, relative payroll only "explains" about 25% of team performance as measured by points percent (which is the number of points divided by the maximum number of points possible and is the same as winning percent).  Again, while the relationship between the two variables are what is to be expected, the amount of "bang for the buck" is not so great.

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