What Is Right With Scully Estimates of a Player’s Marginal Revenue Product
Krautmann contends that Scully’s method for estimating the marginal revenue products of baseball players using team revenues is flawed. Krautmann suggests an alternate method that uses free-agent salaries to impute players' revenue contributions. The Scully method has its weaknesses; however, its flaws are not as serious as Krautmann claims. Though Krautmann’s free market returns method offers a useful approach for estimating players' marginal revenue products, it suffers from deficiencies that the Scully method avoids; thus, it is not necessarily superior to revenue-based estimates.
Bradbury, J. C. (2011). What is right with scully estimates of a Player’s marginal revenue product. Journal of Sports Economics, 14(1), 87-96. doi:10.1177/1527002511418981