I get this question every year:
i would like to know if it is correct to calculate inflation by doing the following: after rosters are frozen then add up all the money frozen, place a bid value on all players to be available to be drafted and then after adding these together subtract from the $3120 that can be spent at the auction, then divide the remainder by bid value of all player available to be drafted. ie. if x= $ frozen and y= $ allocated to available players at auction; inflation is then 3120-(x+y) divided by y"I don't even take that many steps. The formula I use to calculate auction inflation is:
$ Left to Spend/$ Value of Players Available
Last year in my American League, $1,315 in salary was frozen on players that I estimated were worth $1,707. This meant that there was $1,805 left to spend on $1,413 left of talent. So...
$1,805 Left to Spend/$1,413 $ Value of Players Available
equals 27.7% inflation rate.
That's the raw math. As far as theory goes, I've posted a lot of articles over the years with more of the nuance of inflation.
Adjusting for specific conditions in your auction.
Why pushing players to "inflation par" is a bad idea.
Pushing inflation dollars toward the top (inspired by Eugene Freedman).
Separate hitting/pitching inflation.
Projecting your team value using varying inflation rates.
Coping with super high inflation.