Drive for Show, Putt for Dough: Rates of Return to Golf Skills, Events Played, and Age on the PGA Tour

The “winner take all” structure of professional golf, where there is substantial incentive to perform at one’s highest ability, invites investigation into the rates of return to golf skills on the PGA Tour. The biggest earner on tour in 2006, Tiger Woods, won $9,941,563 on the PGA Tour, while the 227th earner made just $65,494. Because professional golfers are thought to produce earnings by means of skill in each area of the game, I shall employ a production function to model the marginal effect of golf skills on earnings. I intend to determine if the advancement of golf technology in the last 12 years has affected the impact of each golf statistic on earnings. It turns out that the marginal effect of driving distance and driving accuracy is negligible, but players with exceptional ability in other areas of the game of golf are handsomely rewarded. Age also has a negligible marginal effect on earnings, while events played does have a noticeable effect. Greens in regulation, putting, and the short game are important in determining the magnitude of player’s earnings.