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Abstract

In this paper, we use data from Major League Baseball between 2000 and 2005 to illustrate how spatial econometric techniques can be used to directly model the interdependence of players. Specifically, we empirically examine the role of task specific human capital on earnings, by modeling player contracts as being determined by their performance, and the performance of other players with similar task specific human capital profiles. Our approach also provides an example to other researchers of a methodological approach to using spatial econometrics in settings where space is defined in ways other than spatial geography.

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