An Empirical Examination of the Development and Impact of Star Power in Major League Baseball

Abstract

We examine the processes by which star power (SP) develops and the impact of SP on both consumer demand and team performance using data from Major League Baseball. First, we examine the dynamics of stardom using data based on player salaries, performance, and award recognition. We find that SP explains additional variance in salaries beyond performance measures. Also, we examine the impact of SP on consumer demand and team success. We find that a team’s stock of SP positively influences consumer demand, even after controlling for various factors ranging from team success to ticket prices.