Hypothesis

The hypothesis is "there is no correlation between salaries and wins." We either need to accept the null hypothesis or reject it. By performing the five-step hypothesis we should determine if the hypothesis is accepted or rejected.

The variability of the data, where no salary data value occurs twice, no mode exists. The median salary of all 30 teams is $66.19 million, not a large variance from the mean. The mean salary of all MLB teams is $73.06 million, but this is a deceptive value, because the range between the highest and lowest payroll numbers is extreme. The salary range is $178.6 million, the dramatic difference between the Yankees payroll of $208.3 and Tampa Bay's $29.7 million salary. The mean value is positively skewed because the New York Yankees payroll is nearly double the next-highest MLB team, the Boston Red Sox. However, the skew value is $2.17 million, a number that does not seem to skew the data much. However, omitting only the highest salaried team from the statistics changes the skew to $0.31 million. Consider also that the standard deviation of all MLB teams is $34.23 million, whereas omitting only the New York Yankees reduces the standard deviation to $23.19 million, a significant difference when only one team is ignored.

The median salary for all MLB baseball teams is $66.19 million, which, by convention, is the average of the two central values in the table of all MLB team salaries. By contrast, the median salary of the five highest MLB payrolls is $125.26 million. Interestingly, the average wins by any team in 2005 is 81 games won. The average wins among the five highest-salaried teams is 91.2 wins, and the five most successful teams averaged 96.8 wins, regardless of the salary level of each team. The statistical data indicates no correlation between payrolls and wins. A good example of this is the Chicago White Sox, whose payroll ranked 13th highest, and yet the team ranked second in total wins.