MLB Payrolls and World Series Success

Now that the White Sox and the Cubs have made hasty exits from post season play, the whole city of Chicago is now on suicide watch. The 5th and the 7th highest payrolls respectively netted exactly one playoff win and the Yankees, Tigers and Mets failed to reach the post season altogether despite having the three highest payrolls (although the Tigers were close, they only missed the playoffs by 14.5 games).

This got my friend Rudi and I thinking. What is the relationship between payroll and post season success? While our wives rolled their eyes and talked about more meaningful things (like the Hills), we punched the numbers into Excel.

As you can see in the graph, many World Series champs had payrolls that exceeded the median payroll by over 50%. Only 5 out of the last 19 champs had payrolls within 5% of the median ('89 A's, '90 Reds, '91 Twins, '02 Angels, and '03 Marlins). As for the big spenders, 9 out of 19 had a top 3 payroll and 11 out of 19 had a top 5 payroll. The highest payroll won the World Series 4 times.

With 30 teams in Major League Baseball, each team theoretically has a 3.3% chance to win the World Series. However, in the last 20 years at least, if you have the highest payroll, you win 21% of the time. Your odds are dramatically improved, but you'll still lose 79% of the time.

Of the teams that are left, the Red Sox, Angels and Dodgers have top 10 payrolls, the Phillies are near the median and the Rays are second to last. The Rays payroll is about half that of the median and a little more than a third of the White Sox. Go Rays!

Gallup Poll: Democrats Not All There

A new Gallup Poll of 4,000 reports that Republicans have much better mental health than Democrats. 58% of Republicans, 43% of independents, and only 38% of Democrats rated their mental health as excellent. You might think this is a result of all the money Republicans have stolen from the poor, but this relationship persists even when you control for income, age, gender, church attendance, and education. The differences in mental health are remarkably consistent across all of these characteristics. The impact of being a Republican on mental health was statistically significant, for the statisticians among you. As we all learned in stats, correlation does not prove causation. While this data does not tell us whether being a Republican improves mental health or if being mentally healthy causes you to choose to be a Republican, I believe that both are true.

Freakonomics and Sports Betting

I don't bet on sports, but I found this story about how Vegas sets point spreads interesting. The authors of Freakonomics (check out their blog) show that bookies do not just try to get half the bets for the favorite and half for the underdog, as you might expect. Losers have to pay 10% on top of their wager, so that would net the bookie 5% of the total wagers. However, the bookie knows that people tend to like the favorite a little more than they should and are biased toward certain teams (recently the Bears and the Bengals have been favored by more fans over equally good teams like Seattle and Carolina) and sets the spread accordingly, tempting them into bad bets. I also learned that if you bet home underdogs in the NFL you will, on average, beat the bookies. Anyway, check out the article if you like the Freakonomics stuff.