Modeling the Determinants of a Professional Golfer's Tournament Earnings

Abstract

Studies examining the determinants of success in professional golf constitute a relatively new and growing literature. Based on the consistency of empirical findings, there is little debate that certain shot-making skills influence a golfer's score and hence tournament earnings. However, the theoretical development of a player's production function in support of empirical specifications is lacking in the literature. Moreover, virtually all studies specify single-equation models that assume a direct relationship between performance and skill, an approach recently questioned in the literature. In response, this research develops a structural model of a professional golfer's tournament success and uses a multiequation framework to estimate the determinants of a player's season-ending earnings. Using this framework, estimates of the value of the marginal product for each shot-making skill are determined and found to be markedly different from those derived from single-equation models.