Wins/Payroll Relationship in MLB

In today’s Wall Street Journal, David Biderman reports on a study conducted by the Harvard Sports Analysis Collective in which the collective did an analysis on payroll and winning in MLB from 1990 to the present. According to the chart, teams adding less than 10 million dollars in opening day payroll or keeping payroll constant added 1.23 wins. The biggest gains (defined by wins) were made by teams who shed more than 15 million in payroll.  More information can be found on the blog post for the Harvard Sports Analysis Collective.

It would be interesting to see what other factors the study controlled for in order to compare this study with other studies in the literature on the relationship between team payroll and performance. In addition, it would be interesting to examine the relationship between team payroll and performance with performance being measured by the Pythagorean winning percentage or other Sabermetric calculations.

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