I would like revisit this post because I have some questions about the original post. The main question is how exactly do you apply weights to each category? There are a number of programs out there that now calculate numbers:http://www.fantasybaseballhub.com/dollar_values.html
The problem is each algorithm is different. ESPN's Player Rater will also give you "points" and I can transfer to dollar values, and I've worked backwards to get their weights for each category, but I can't figure out how to calculate them on my own.
Here is how I calculate dollar values, a little different than the first post:
1. Define your player universe and their projected stats.
2. Calculate the averages of each category per player, as well as average AB and IP per player.
3a. (Counting Stats) Calculate category points of each player by 1) taking the player's projected stat minus the average of that stat from #2, and 2) multiply by its CATEGORY WEIGHT.
3b. (Average Stats, i.e. BA, WHIP, ERA) Calculate category points of each player by 1) taking the player's projected stat minus the average of that stat (for BA, the reverse for WHIP/ERA), 2) mutiply by the players projected AB/IP divided by the league average AB/IP, and then 3) mutiply by its CATEGORY WEIGHT.
4. Sum the category points per player to get total points per player.
5. Calculate the average dollar to be spent on a hitter and pitcher.
6. Separately for hitters and pitchers, sum up all the total points for all hitters and pitchers, and divide both numbers by the number of hitters and pitchers in your universe. The single hitter and pitcher whose total points comes close to the averages are "the mean" hitter and pitcher.
7. Figure out the best player who you think the league will take at the minimum bid (usually $1 for most leagues).
8. You now have two data points - two players whose total points equate to a dollar value in your league. Linearly interpolate all of the other player's dollar values based on their total points. All the players whose total points are lower than the player in #6 are worth $1, or whatever your minimum bid is.
The only problem here is how the CATEGORY WEIGHT is actually calculated. I've reverse engineered ESPN's Player Raters numbers, but I don't know how they come up with it. Any suggestions? This is important because the weights you apply to saves is important, and I'm trying to figure out the true value of closers in, say, a 5x5 league.