Russ Roberts

The Economics of Moneyball

EconTalk Episode with Skip Sauer
Hosted by Russ Roberts
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Skip Sauer of Clemson University and EconTalk's Russ Roberts discuss the economics of Michael Lewis's Moneyball. Michael Lewis claims that the Oakland Athletics [A's] found an undervalued asset--the ability of a baseball player to draw a walk--and used that insight to succeed while spending less money than their rivals. Is it true? Drawing on Sauer's research, Sauer and Roberts try and answer the question and lots of others along the way. How competitive is the baseball industry? Why do some baseball skills get more attention than others? How important is defensive ability? Along the way you'll learn why Kevin Youkilis is a better lead-off hitter than you think and some of the peculiar incentives facing baseball teams and owners.

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Readings and Links related to this podcast

Podcast Readings
HIDE READINGS
  • Raymond (Skip) Sauer's Home page
  • The Sports Economist, Skip Sauer's blog
  • "An Economic Evaluation of the Moneyball Hypothesis", by Jahn Hakes and Skip Sauer. Free online prepublication edition. Published in the Journal of Economic Perspectives, August 2006
  • Michael Lewis's Moneyball, at amazon.com
  • The Economics of Sports, a previous EconTalk podcast with Skip Sauer
  • Sportometrics, by Robert D. Tollison, and Sports, by Gerald Scully. Concise Encyclopedia of Economics
  • Monopoly, by George Stigler, Concise Encyclopedia of Economics
  • Addendum: Michael Lewis on the Hidden Economics of Baseball and Football. Podcast with Michael Lewis, Jan. 2007
  • Highlights

    Time
    Podcast Highlights
    HIDE HIGHLIGHTS
    3:05On-base percentage defined. Avoiding making an out, Lewis's hypothesis that walks were undervalued in bidding on players till the Oakland A's exploited it.
    8:30Billy Beane reveals trade secrets
    11:10Statistics vs. the wisdom and instinct of scouts
    12:30Alternatives: Are the Oakland A's just trying to put together a "good-enough team" to satisfy their clientele, rather than consciously hiring partly based on on-base-percentages or walks? Or, a third hypothesis: Are they just stupid?
    25:50Fan awareness of the controversies and new statistics as a factor
    27:50Is baseball competitive?
    38:10Critique of on-base %-age by Steve Levitt
    45:21Pitching, fielding, other stats
    47:00In passing, Sauer alluded to a quote from Yogi Berra. The quote is: "Baseball is 90% mental, the other half is physical." More Berra quotes
    Mailbag (Time mark 54:01)
      In the podcast Economics of Religion Larry Iannaccone discusses the theory that state-sponsored religion should have the weakest adherents. This seems to work with countries like Sweden, but what about countries like Iran?
    Addendum: Check out the follow-up questions addressed in this Mailbag:

    Comments and Sharing



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    COMMENTS (2 to date)
    Max Roberts writes:

    Hey Professor Roberts,

    I've been listening to this podcast since the first few episodes and I am very happy to see how well you've expanded on the original premise. The guests you have are always entertaining and very knowledgeable. I always enjoy the economic jokes too. As an economics major in the college of Arts and Sciences at Indiana University I've found this resource invaluable in terms of reinforcing my economic analysis skills. I've been meaning to chalk the sidewalks outside the econ building to try and get you more listeners as this podcast is a complementary good to most of the classes these students will take. If I may offer a request regarding a future episode, I would really like to see an episode covering international trade, maybe discuss the Doha round and the future of trade relations in an ever flattening world. Keep up the good work. Max Roberts

    Shaun Anthony writes:

    Another great podcast Russ. Just wanted to say thanks for the podcasts. I never miss one. I keep an eye out for interesting new economics content on the Net and your podcast is my favourite.

    Shaun,
    Canberra, Australia

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