Pitfalls to Measuring Competitive Balance With Gini Coefficients

Abstract

League-winning percentage Gini coefficients have seen recent use as measurements of within-season competitive balance in Major League Baseball. The authors demonstrate that the zero-sum nature of league play renders past estimates inappropriate. Adjusted for league play, Gini coefficients reveal a much larger competitive balance problem than shown in previous estimates. However, additional complexities involving unbalanced schedules, interdivisional play, and now interleague play must be overcome before winning percentage Gini coefficients can give precise estimates of competitive balance. The authors suggest using the traditional measures of winning percentage standard deviations and their idealized values to analyze within-season competitive balance over time until these issues are overcome.