By David Butler
As is the case with other sports such as tennis or horseracing, a golfer’s earnings is dependent on their relative performance. As each players performance can be precisely measured and we have access to all of the information regarding the distribution of the purse, researchers can gain some useful insights into a pure prize economy. The graph below represents the mean and median earnings for golfers on the PGA tour from 2000 to 2015.
As is the case with other sports such as tennis or horseracing, a golfer’s earnings is dependent on their relative performance. As each players performance can be precisely measured and we have access to all of the information regarding the distribution of the purse, researchers can gain some useful insights into a pure prize economy. The graph below represents the mean and median earnings for golfers on the PGA tour from 2000 to 2015.
On average PGA tour golfers earned $658,300 in 2000. They earned $829,726 on average in 2015. During the mid-00’s this mean was higher. Of course these averages mask the substantial variation in the distribution, with the vast majority of golfers earning a relatively modest sum. For instance, in 2015 the top 20% of earners (77 out of 386 PGA tour golfers) accounted for 68.25% ($218m) of the total purse. The standard deviation for most years in the dataset is over $1m. While the size of the pie has increased over the last 15 years, inequality in the earnings distribution has also amplified. It has been greatest in the final two years of the dataset, 2014 and 2015. This growing inequality has largely been driven by more players participating on the tour since 2010.
Given the skewed prize structure of golf tournaments, where prize money is allocated in a descending order from 1st place, it is not surprising that this degree of inequality exists. That said, there is a long list of earners in all PGA tour events, sports such as horseracing see a much shorter list of earners (usually 1st to 4th only), so while golf may be unequal as sports go, it is not the worst.
For a more detailed take on earnings in PGA tour golf see Gerald Scully’s 2002 paper on The Distribution of Performance and Earnings in a Prize Economy in the Journal of Sports Economics.
Given the skewed prize structure of golf tournaments, where prize money is allocated in a descending order from 1st place, it is not surprising that this degree of inequality exists. That said, there is a long list of earners in all PGA tour events, sports such as horseracing see a much shorter list of earners (usually 1st to 4th only), so while golf may be unequal as sports go, it is not the worst.
For a more detailed take on earnings in PGA tour golf see Gerald Scully’s 2002 paper on The Distribution of Performance and Earnings in a Prize Economy in the Journal of Sports Economics.
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