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Is Steroid Use in Baseball a Positive-Sum Game?

2008 May 24
by John Palmer

I don’t like pitchers’ duels in baseball. I like to see high-scoring games. Low-scoring games remind me too much of all the things I didn’t like about pre-2005 hockey games and the old pre-free-guard-zone curling bonspiels and still don’t much like about soccer.

I realize that many sports fans will disagree with me on this, but overall I suspect that most fans and potential fans share my views that low-scoring games are pretty boring no matter how artistic or professional or whatever a well-pitched and well-defenced game might be. Curling changed its rules to generate more scoring (and more fan interest). Baseball made several moves to increase scoring after the doldrums of the 1960s. Basketball added the 3-point shot. And baseball entered its revival phase as players started hitting more home runs and as teams began to score more runs.

But the past two years have been different, as Tom Boswell pointed out in last Friday’s Washington Post.

This spring, for the second straight year, home run totals… have shrunk dramatically. Last season’s 8 percent drop in home runs was welcomed, but with caution. … [H]ome runs have fallen this spring by another 10.4 percent.

Suddenly, a sport that produced 5,386 home runs in 2006 is on pace for 4,442 this year — a 17.5 percent drop, or a loss of almost 1,000 home runs in just two seasons. …

This season, major league teams have scored 8.98 runs per game. Since 1871, there have been 1,750,230 runs in the majors, an average of 9.11 per game. Warm weather, when fly balls carry farther, might bring the game almost exactly back to its long-term scoring trend.

Every sportswriter or sportscaster I am aware of has attributed this reduction in runs scored and decline in home runs to the reduced use of steroids in professional baseball. Some, like Boswell, might argue that this is “a good thing”, but I am not so sure.

Typically when sports economists talk about steroid use, they/we present it as a negative-sum game: each player is made stronger, but since all players are made stronger, the benefit to each player is near zero but those on steroids must then bear the later health costs that come from using steroids. Following this logic, many of us have been puzzled that players’ associations have been so reluctant to support bans on steroid use. And while this scenario seems plausible, I’m not so convinced by it any more.

So let’s make some assumptions:

  1. In general, ceteris paribus, fans prefer more home runs to fewer. Again, quoting Boswell,
    “From a personal and aesthetic point of view, I like this kind of baseball better,” MacPhail said. “I like a well-played game more than a slugfest. But plenty of fans like runs.” [Emphasis added]. One test of this assumption will be to see what happens overall to MLB attendance.

  2. Conditional on the first assumption, (and again, cet. par.) the marginal revenue of runs is positive, the marginal revenue of home runs is positive, and the marginal revenue product of slugging is positive; i.e. for a given winning percentage, etc., if fans expect more runs and more home runs, they’ll shell out more to attend games and buy team merchandise. There is an implication in the Boswell piece that general managers on the whole are relieved to see the home run totals decline since they anticipate not having to pay so much for the big-bopper-type players.
  3. The health costs of steroid use (assuming there are any) are borne by the player-users themselves; there are no negative externalities from steroid use.

I realize this last assumption is open to question. To the extent that health insurance providers do not risk-rate their premia according to steroid use, other people in the same risk pools might be bearing some of the health costs of steroid use, if there are any (and I don’t accept anecdotal, Lyle Alzedo-type evidence on this score). Also, to the extent that steroid use leads to undesirable personality changes (do we know that it doesn’t also lead to some desirable personality changes in many players?), that might be a cost which is not taken into account by the player-users. But if these costs are negligible or small, and if the revenue and salary gains are large, maybe overall the expected net gains to the teams and to the players from steroid use would be positive.

And maybe, just maybe, that is why professional sports teams and players’ associations did NOT rush to ban the use of steroids, especially in baseball. I am less persuaded that steroid use was a positive-sum game in the NFL, which also might help explain why it was banned so much earlier in the NFL than in MLB.

[cross-posted to EclectEcon]

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