"Malaysia Prime Minister Mahathir Mohamad and the Sultan of Johor are seen in a blue Proton Saga... "When asked whether there is any tension with the sultan, Dr Mahathir said: “No, I don’t see anything because I went to see him and he drove me to the airport. I don’t want to comment on the sultans because if I say anything that is not good then it’s not nice because he is the sultan”"

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Sunday, May 21, 2006

Comparative Advantage in Practice: The Case of Babe Ruth

Everyone knows that Babe Ruth was the greatest slugger in the history of baseball. Only true fans of the sport know, however, that Ruth also was one of the greatest pitchers of all time. Because Ruth stopped pitching after 1918 and played outfield during all the time he set his famous batting records, most people don't realize that he could even pitch. What explains Ruth's lopsided reputation as a batter? The answer is provided by the principle of comparative advantage.

As a player with the Boston Red Sox early in his career, Ruth certainly had an absolute advantage in pitching. According to historian Geoffrey C. Ward and filmmaker Ken Burns:

In the Red Sox's greatest years, he was their greatest player, the best left-handed pitcher in the American League, winning 89 games in six seasons. In 1916 he got his first chance to pitch in the World Series and made the most of it. After giving up a run in the first, he drove in the tying run himself, after which he held the Brooklyn Dodgers scoreless for eleven innings until his teammates could score the winning run... In the 1918 series, he would show that he could still handle them, stretching his series record to 29 2/3 scoreless innings, a mark that stood for forty-three years.


The Babe's World Series pitching record was broken by New York Yankee Whitey Ford in the same year, 1961, that his teammate Roger Maris shattered Ruth's 1927 record of 60 home runs in a single season.

Although Ruth had an absolute advantage in pitching, his skill as a batter relative to his temmates' abilities was even greater: His comparative advantage was at the plate. As a pitcher, however, Ruth has to rest his arm between appearances and therefore could not bat in every game. To exploit Ruth's comparative advantage, the Red Sox moved him to center field in 1919 so that he could bat more frequently.

The payoff to having Ruth specialize in batting was huge. In 1919 he hit 29 home runs, "more than any player had ever hit in a single season," according to Ward and Burns. The Yankees kept Ruth in the outfield (and at the plate) after they acquired him in 1920. They knew a good thing when they saw it. That year, Ruth hit 54 home runs, set a slugging record (bases divided by at bats) that remains untouched to this day, and turned the Yankees into baseball's most renowned franchise.

--- Krugman and Obstfeld, International Economics - Theory & Policy (7th ed.)

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I didn't understand that, but it was amusing.
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