An In-Class Experiment to Teach Marginal Revenue Product Using the Baseball Labor Market and Moneyball

 
Wooten & White (2018)

In this paper, we describe a class project exploring principles of Marginal Revenue Product, Labor Markets, and estimation of firm profits through the professional baseball labor market. The goal of this project is to give the student a better understanding of MRP through the process of collecting and analyzing data about professional baseball free agents. This task highlights a key learning objective in many economics courses with an activity that increases student engagement. The project culminates in an in-class draft and season simulation activity that allows the students to apply the information they have collected in order to make decisions based on their work.

 

Instructor Resources

The simulation files are available for direct download below and include a zipped file containing a copy of our working paper for instructional purposes, the project instructions for students, a 2017 spreadsheet of available free agents for the simulator, and a printable version of the spreadsheet for student use. 

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The Economic Evaluation of the Moneyball Hypothesis (Hakes & Sauer, 2006)

Hakes & Sauer test the portion of Michael Lewis's book, Moneyball, that evaluates the impact of on-base percentage (OBP) and slugging percentage (SLG). The authors create an Index, which is used in the Moneyball Project to estimate the value of an individual free agent. This paper is the foundation of the project and gives a great overview of valuing a player in Major League Baseball using simple statistics that students can collect from ESPN and USA Today.

 

Contact Us

Jadrian Wooten, PhD

Assistant Teaching Professor of Economics

 

Department of Economics

The Pennsylvania State University

315 Kern Graduate Building

University Park, PA 16802

Jadrian@psu.edu

Dusty White, PhD 

Assistant Professor of Economics

College of Business Administration

University of Nebraska at Omaha

Mammel Hall Suite 332E

6708 Pine Street

Omaha, Nebraska 68182

drwhite@unomaha.edu