Take a look over here if you want to get the background for this series, otherwise read on.
Sports + Numbers Prediction: "I am guessing that returns to inequality are strong here too, with relatively high leverage of the individual players resembling the NBA more than the NFL or MLB."
The data
To see the impact of inequality we will look at each team’s Gini coefficient against their winning percentage, controlling for team spending. The resulting equation gives us an r-squared value of 0.13 with only salary spending being significant (P-value of 0.00008) while the Gini coefficient comes in at a P-value of 0.21.
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| Payroll vs Points % (total points / potential points) - NHL 2009-10 to 2012-13 |
For every million dollars in team spending the expected increase in winning percentage is 0.00397. For a team that spends $10 million more than a comparable team – all else equal – we would expect them to win 3 additional games (or win 2 more with two additional overtime losses (or win 1 more with four additional overtime losses (or win the same number but have six additional overtime losses))).
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On inequality the - insignificant - coefficient is 0.19. Within the range of Gini coefficients in baseball (0.22 to 0.47) this would mean a difference of 8 points (4 wins but I’ll spare the rest) from the most equal to the least equal (more wins to the least equal). Not nothing but not exactly a huge impact. The gap in payroll ($30 million to $71 million) projects to a gap of nearly 27 points.
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