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On BP: deMause Adjusts Marginal Payroll/Maginal Wins PDF Print E-mail
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Written by Maury Brown   
Thursday, 15 February 2007 09:01
Baseball ProspectusFor those of us who have worked with Doug Pappas' Marginal Wins/Marginal Payroll formula, there was always the sense that Doug had hit on a fantastic evaluation tool to measure how well clubs were converting dollars to wins (It was a metric that would go on to inspire Michael Lewis' best-seller Moneyball. Lewis was impressed with how the Oakland A's under Billy Beane continually ranked at the top of the MP/MW charts) but with that, there were questions around the formula, that even Doug mentioned when he initially published.

My Baseball Prospectus colleague, Neil deMause has done a great job working with Nate Silver to get a better metric.

As Neil writes:

With Nate's figures in hand [NOTE: Nate's figures involve the use of "marginal economic value" which is detailed in Baseball Between the Numbers] (adjusted upwards by eight percent to account for inflation from 2005 to 2006), I've taken a shot at updating MP/MW to something that better answers Doug's original question: Which teams are getting the most for their investment in players? The formula is the same as Doug's original, with one twist: The denominator is now what I'll call Weighted Wins where each win counts for a multiplier of how many times its revenue potential exceeds the $806,597 that a "replacement-level" win counts for. (The 90th win, for example, which can be expected to generate $4,744,481 under Nate's formula, is worth 5.88 weighted wins.)


I hope you all have a BP subscription, as it's a great read, and those that don't have a BP subscription can read Neil's follow-up.

I'd say that Neil's getting very close on this. He really addressed some of the factors in how measurements were off with the prior formula. As Neil writes, "No longer are the Colorado Rockies judged to be a more efficient franchise than the Oakland A's, because the A's spent an extra $21 million to win a division title while the Rockies finished in a tie for last."

Now, if we can add in the scale of exactly how many players are on the DL for each club over the course of the season, as opposed to using a static figure, I think we'd be getting yet another tweak in this seminal metric from Pappas.

 
 
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