Wednesday, October 3, 2018

MLB Team Payroll Inequality

Yesterday, I took a look at competitive balance in MLB and found that while the leagues overall have been improving in terms of their competitiveness, the AL this past season did not.  So now, what I want to look at is the level of team payroll inequality using team payroll data from www.spotrac.com.

In the chart below is the MLB Team Payroll Gini coefficients from 2011 to 2018.  As you can see, team payroll is highly unequal.  Want to know how to calculate the Gini coefficient?  Look here.

 

So, if MLB team payroll is unequal as we can see from the Gini coefficients above, what is the relationship between payroll and performance?  That I will address tomorrow.