The Baseball Draft

Abstract

This article provides an analysis of the baseball draft. The objective is to determine whether the ability to recognize talent, that is, a player who will reach the major leagues, varies with the position of the player across different baseball clubs or with the level of schooling attoined by the player when he is drafted. The data set is a choice-based sample, and the author uses econometric techniques specifically developed for such samples. It is found that in the long term, there is no statistically significant difference between clubs in terms of their ability to find major league prospects. Also, the value of one attribute, namely college experience, was underestimated by the market for a substantial period of time. Eventually, however, the value of college experience was assimilated by the market.