What Do Economists Have to Say about Racial Discrimination in MLB?

Plenty. Economists have long used sports to analyze racial discrimination in labor markets because sports offer good measures of worker productivity that are difficult to find in most occupations.

I bring this up in response to a claim put forth by Orlando Hudson as reported by Jeff Passan.

“You see guys like Jermaine Dye without a job,” Minnesota Twins second baseman Orlando Hudson said Monday. “Guy with [27 home runs and 81 RBIs] and can’t get a job. Pretty much sums it up right there, no? You’ve got some guys who miss a year who can come back and get $5, $6 million, and a guy like Jermaine Dye can’t get a job. A guy like Gary Sheffield, a first-ballot Hall of Famer, can’t get a job. …

“We both know what it is. You’ll get it right. You’ll figure it out. I’m not gonna say it because then I’ll be in [trouble].”

What Hudson wants to say: He believes there is a racist element to the free-agent market in baseball, and that it’s paralyzing the 36-year-old Dye’s ability to earn what non-blacks with commensurate numbers received in the offseason.

In terms of the current market, I cannot say whether or not race is playing a role in player salaries; however, past studies of racial discrimination in baseball do not support the racism hypothesis. A survey article by Lawrence Kahn reveals that economists have found little evidence of salary discrimination in baseball. (Here is a more-recent article which contains similar information.)

(Click image to enlarge)
Literature Review

Analyses of racial bias are tricky, because omitted variable bias may hide existing racism or identify non-existent racism. Indeed, in a study I conducted using the baseball card market to examine consumer racial preferences I found that employing inferior performance metrics can lead to erroneous declarations of racism. Another problem with studies of racial discrimination is that data on the race of players is not widely available. Just determining the races of players is difficult.

I cannot say that the current market is free of racism; in fact, I would be surprised if it was racism-free. However, given the quantity of studies done that have found little to no effect, the burden of proof regarding racism rests on those who claim racism exists in baseball to provide evidence. Given the length of time since such studies have been conducted, I would welcome further study of the subject. If someone is willing to provide the racial classification to me, I’d be happy to estimate the impact of race on player salaries.

6 Responses “What Do Economists Have to Say about Racial Discrimination in MLB?”

  1. t ball says:

    Baseball is so competitive that if a player has value and will help a club win, they will sign him if they can afford to. Dye just has the bad luck of being a free agent at a terrible time. It’s supply and demand, and Dye is not good enough right now to be that in demand.

  2. Ramón Estrella says:

    Well i would rather prefer Dye than Frank Catalanotto, even if getting Dye cost me more. So, i think its not just bad luck!!. I could buy the idea of Supply and Demand Theory but thats not conclusive.

  3. Doug says:

    What do economists have to say about ______[insert absolutely any topic here]__________?



  4. Joe B says:

    Arguments regarding racism or lack of in the case of a single player on the basis of performance, salary demands, and personal preference on the part of a single fan are nonsensical. If someone has witnessed derogatory racial comments during negotiations or internal team discussions, that would constitute potentially significant evidence. Otherwise the intrusion of myriad other factors, not least of which is “fit” within the systems, rosters, and preferred lineups of those teams that have *potential* need for a player at a given position make it impossible to accurately determine any putative single “cause” for a player being signed or not being signed. That’s why studies of the effects of any single factor, including racism, on hiring and salary are done across large numbers of players. Such studies attempt to control for those other factors through the hopefully at least semi-random impact of those factors across multiple players.

    I tend to agree with the “economist” jokes, but there is something to be said for distilling things down to a relatively simple story examined with some rigor across large numbers of instances. It’s hard to do that without resorting to statistics, which as Twain puts it are right up there with lies and damn lies.

  5. Marc Schneider says:

    People see things through their own lens of experience and knowledge. It’s unreasonable to expect Hudson to have an objective view here. I think this is just a meaningless comment by a guy with little knowledge that shoulde be ignored.

    This isn’t to deny the historical existence of racism in baseball, which is pretty obvious. But people’s attitudes have changed, in general, and I don’t see any reason to think that the entire baseball industry is so racist that they have decided not to sign Jermaine Dye because he is black. It would be more likely, IMO, for that to happen to someone like Milton Bradley, who is perceived as a trouble maker–yet he has a job.

  6. John K says:

    Another paper on racism in baseball