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Payroll Efficiency Rating, measure developed by Shawn Hoffman expressing the ratio of a team's estimated marginal revenue (derived from third-order win totals and market size factors) to its expected marginal revenue (derived from payroll). Draft pick value is also factored in to account for the increased value of a high first-round pick. The concept behind PER was introduced here though the name came later.
PER' is a variant of this which substitutes actual win totals for third-order win totals in the estimated marginal revenue calculation.
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