We wish to thank Rod Fort for assistance in finding and cleaning the salary data. We also thank David Berri, Rod Fort, Brad Humphreys, Daniel Slottje, Steve Walters, and two anonymous referees for helpful comments and suggestions. The usual caveats hold.
Testing the Determinants of Income Distribution in Major League Baseball
Article first published online: 26 MAR 2007
Volume 42, Issue 3, pages 469–482, July 2004
How to Cite
Jewell, R. T., McPherson, M. A. and Molina, D. J. (2004), Testing the Determinants of Income Distribution in Major League Baseball. Economic Inquiry, 42: 469–482. doi: 10.1093/ei/cbh074
- Issue published online: 26 MAR 2007
- Article first published online: 26 MAR 2007
Using data from U.S. Major League Baseball, this article compares parametric and nonparametric Gini coefficients for each team and year. We employ a panel-data model to investigate the time-series and cross-sectional factors affecting the Gini coefficients and the parameters of the preselected distribution. We find that much of within-team income distribution is determined by time-related variables, with the 1994 MLB strike having an especially strong effect. A team's market potential does not seem to affect its salary distribution, but the average age of the players on a team's roster does. Furthermore, inequality first increases with team payroll, then decreases before increasing again.