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Fielding Independent Pitching converts a pitcher's three true outcomes into an earned run average-like number. The formula is (13*HR+3*(HBP+BB)-2*K)/IP, plus a constant (usually around 3.2) to put it on the same scale as earned run average.
FIP is a component ERA inspired by the work of Voros McCracken on defense-independent pitching statistics, but has become more widely used because of the ease of computation - it requires only four easily-found box score stats, uses only basic arithmetic operations and has four easily-memorized constants. It was conceived of by both Tom Tango and Clay Dreslough, the latter of who called it Defense-Independent Component ERA.
At Prospectus, we are including hit batters in the walks term. The constant we use is both league and season specific - in other words, a pitcher in the American League will have a different FIP constant than a pitcher in the National League. This differs from the presentation of FIP on sites such as Fangraphs, which use one constant for both leagues in each season.
Here is an example of the Fielding Independent Pitching spectrum based on the 2011 season:
Excellent - Roy Halladay 2.17
Great - David Price 3.36
Average - Tim Stauffer 4.00
Poor - Carlos Zambrano 4.56
Horrendous - Bronson Arroyo 5.68
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