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Development of a Win Production Function and Evaluation of Cross-Sectional Dependence

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  • Jin Lee
  • Young Hoon Lee

Abstract

We consider correlations between pairs of teams when deriving a win production function for professional baseball teams. Previous empirical studies derived win production estimates based on the assumption that the error terms were independent, but this is not reasonable given that a win is a relative output. The total number of wins per season is fixed: all teams share wins, in that a win for one team is a loss for the opponent. We applied spatial panel data models to a Major League Baseball dataset to control for cross-sectional dependence. A strong negative dependence was found; our estimates differ somewhat from previous estimates that assumed cross-sectional independence. JEL: L83, L80, Z20

Suggested Citation

  • Jin Lee & Young Hoon Lee, 2021. "Development of a Win Production Function and Evaluation of Cross-Sectional Dependence," Journal of Sports Economics, , vol. 22(4), pages 412-431, May.
    • Handle: RePEc:sae:jospec:v:22:y:2021:i:4:p:412-431
    DOI: 10.1177/1527002520983438
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    1. Ye Yang & Osman Doğan & Süleyman Taşpınar, 2023. "Observed-data DIC for spatial panel data models," Empirical Economics, Springer, vol. 64(3), pages 1281-1314, March.

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    More about this item

    Keywords

    win production; spatial model; cross-sectional dependence; Major League Baseball;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • Z20 - Other Special Topics - - Sports Economics - - - General

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