A few years ago, a blogger named Scott McKinney conducted a study on the success rate of Baseball America's annual listing of the top 100 prospects. Using a similar methodology to McKinney's original work, Matt Perez of Camden Depot has updated the study with recent seasons.
Here's a link to Matt's results. A couple of excerpts:
These are similar results to the ones seen in Scott's study. Three out of every four pitching prospects fail and two out of every three hitting prospects fail. About 70% of all prospects fail. The difference between hitting and pitching prospects has decreased but is still reasonably large.
Not surprisingly, players ranked in the top 20 fare much better than those rated lower. The prospect hounds do a good job of identifying the top prospects. In fact, Baseball America has apparently done a better job in recent years at this. Matt grouped players into three levels of results: Bust, Success and Superior. Here are the rates of Superior results by year:
1990-93: 13.8 percent
1994-97: 15.3 percent
1998-2002: 16.2 percent
2003-06: 20.3 percent
The biggest difference has been in the success rate of top-20 pitching prospects, possibly suggesting that teams are doing a better job of protecting the health of young pitchers, Baseball America has done a better job of identifying the best pitchers, or pitching prospects have simply gotten better (possibly with the help of steroid testing and the banning of amphetamines). As Matt writes:
It also seems to indicate that pitching prospects ranked from 1-20 have shown significant improvement. In 1990-1993 they succeeded only 15% of the time but from 1994-2002 they succeeded 40% of the time and in 2003-2006 they succeeded more than 70% of the time.
Anyway, check out the whole post for more data. If you love prospects, it's a good reality check.