Abstract- Analysis of Relative Payroll Differences and Win Percentage in Major League Baseball

Many people, sports enthusiasts included, tend to believe the notion that teams with the most money win the championships. My project will look at data for the past ten years from Major League Baseball and examine if that is the case. Sports economists have shown that there is a positive correlation between payroll (amount of money a team pays its players) and the number of wins that team earns. I will be modeling my project off a previously published paper by Szymanski, Zimbalist, and Hall, using simple and multiple linear regression to model the effects of payroll on a team’s win percentage. I will be using my data set to answer different questions, such as whether money spent on a pitcher is more effective than money spent on a catcher or an outfielder; or if payroll size may be significant in the regular season by not in the post-season.