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Abstract:
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This study explores the Present Value in dollar terms of a specific draft slot in the Major League Baseball (MLB) Rule IV Draft. This topic is especially important now as young talent in the game continues to become more valuable. The slow 2017-18 offseason demonstrates the emphasis teams place on developing cheap, in-house talent in order to avoid paying players top dollar in free agency. By analyzing the MLB Rule IV Drafts between 2000 and 2009, this research updates previous studies on the MLB Rule IV Draft. In order to accomplish this, the performance of players selected at each slot in the draft is evaluated and brought to the Present Value of the time they were selected using a discount rate. The performance of the players was determined using the baseball-reference Wins Above Replacement (WAR) metric. By using various econometric techniques, including linear regressions, this study investigates the value of players at different slots in the draft as well as the success of high school and college draftees in the MLB Rule IV Draft between the years of 2000 and 2009.
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