The following report is concern with the impact, if any; team salaries in the MLB have on their ability to win games. The data set includes the average salaries and wins for all the teams in the league from 2006 to 2008. The data set is shown below along with graphs and statistical findings that were found interesting and helpful in forming a theory on whether or not heavy salary spending resulted in more wins. I find it interesting when sports and statistics are used with one another. I imagined before analyzing the data that there would be a positive correlation between average salary and the average number of wins in the MLB.
To answer the question, I found the correlation between Average Team Salary and Average Team Wins. The correlation came to be r=0.63762019. I infer this as there being a positive correlation between the two variables but not a strong one. The r^2 for the data set came to be 0.40655951. The relatively low r^2 leads me to believe that approximately only 40.66 % of average team salaries can explain average team wins in the MLB. The data set also only included 3 years of MLB data. A bigger set of data would have been more helpful in analysis. In conclusion and with conjunction of the available data, there is a positive, although not strong, correlation between team salaries and team wins in the MLB but may spending isn't necessarily leading to wins. There could be a variety of factors involved. However, big spending if possible doesn't hurt the team’s chances come October.
Simple linear regression results:
Dependent Variable: Wins Independent Variable: Payroll Wins = 69.133202 + 0.13181734 Payroll Sample size: 30 R (correlation coefficient) = 0.63762019 Rsq = 0.40655951 Estimate of error standard deviation: 5.8421625 Parameter estimates:
Analysis of variance table for regression model:

Already a member? Sign in.
Dec 10, 2014
Nice concise write up.