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Pigou at the Plate

Externalities in Major League Baseball

Kennesaw State University

Douglas J. Drinen

Sewanee: The University of the South

Past studies estimating the marginal revenue products of baseball players have assumed individual players' hitting performances to be independent of teammate spillovers. However, the baseball community's widely held belief in "protection"—that a good (bad) player can improve (diminish) the hit probability of the batter who precedes him in the batting order—violates the assumption of the independence of batting outcomes. In this paper, the authors identify two possible hitting externalities in baseball. Using play-by-play data the authors find evidence contrary to the protection hypothesis—the quality of the on-deck hitter negatively impacts the preceding hitter—though the magnitude of the effect is very small.

Key Words: externalites • baseball • marginal revenue product

Journal of Sports Economics, Vol. 9, No. 2, 211-224 (2008)
DOI: 10.1177/1527002507300178


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