Payrolls and Playoff Probabilities in Major League Baseball

Many people have already studied team performance in Major League Baseball, using innumerable offensive and defensive components of the game to explain variations in win records. However, from the fans perspective, what matters more than the teams winning percentage alone is the likelihood that their team will play well enough to make the playoffs, ultimately win their league championship, and maybe even win a World Series. We examine the relationship between team payroll and the probability of playing in the postseason between 1998 and 2011. We want to know if there is empirical support for the claim that the more equally the payroll is distributed among team members, the more likely the team is to play in the postseason.