How does one get a high/low BABIP? Is this statistic for hitters and/or pitchers? What does a high/low BABIP mean?
Definition: BABIP = (Hits - Homeruns) / (At Bats - Strikeouts - Homeruns + Sacrifice Flies)
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The BABIP calculation/metric can be used for both batters and pitchers. The formula/definition that you mention above is a good indicator of what it measures - the percentage of hits for balls that were hit into play. Per this excerpt from ESPN:
BABIP, or batting average on balls in play, was originally designed to measure a pitcher's ability to prevent hits on balls in play. Today it's widely used to evaluate both pitchers and hitters, and it's a calculation of a hitter's batting average -- or pitcher's batting average allowed -- on batted balls put into the field of play. That means walks and strikeouts don't count; those aren't batted balls. Nor do home runs; those don't land within the field of play.
For pitchers, some analysts view a low BABIP as an indicator that the pitcher has been "lucky," since they believe that pitchers have little control over balls that are hit in play. In this type of analysis, pitchers that have lower BABIP that their historic averages are viewed as being likely to perform worse in the future, as their BABIP should revert to the mean/norms. However, pitchers might have consistently higher/lower BABIP due to their styles (e.g., percentage of ground balls vs flyballs) and the quality of their fielders.
Similarly, this metric can be used to measure the "luck" of hitters - a higher than normal BABIP may indicate that a hitter will "cool off" over the course of the season, while a hitter that has a low BABIP will tend "heat up" as the season progresses.
As the ESPN article notes, there are several additional factors that impact BABIP - speed of the hitter, quality of contact, and the quality of the defense. As an example, hitters will a good hitting eye may have better quality of contact and have better BABIP rates than their peers. Faster hitters might also be able to beat out throws to first, thus increasing their BABIP.
A normal BABIP for a pitcher is around.300. It's possible due to exceptionally poor, or exceptionally good defense that "normal" could be anywhere from .290 - .310. So anywhere within that spread should be considered somewhat normal.
What a high BABIP tells us is that a pitcher is unlucky. It tells us this because we are generalizing that once a ball is put into play (notice strikeouts, homeruns, sac flies and walks do not count) the pitcher has no effect on whether that ball is a hit or an out. If the average ball in play goes for a hit at a .300 rate, but pitcher A has a BABIP of .370, it's telling us that this pitcher should regress towards the mean. So if the pitcher does regress towards the mean, we would expect other stats like ERA or WHIP to come down as well.
On the flip side, a low BABIP tells us that a pitcher has been lucky that more balls hit in play did not go for hits. So we can look at a pitcher with a .250 BABIP and expect that his other stats may be going up as well as he regresses towards the mean.
Now it's certainly not full proof and doesn't take into account fly ball/ground ball rates etc... But used with other advanced statistics, it can tell you quite a bit.
BABIP can also be used for hitters, however it is not quite as helpful. While it can be generally said that once a ball is in play, a pitcher has little influence over whether or not that ball is a hit, it can't be said for hitters. This is mostly due to speed, where faster hitters are more likely to effect their BABIP due to running out infield singles.
BABIP is "batting average on balls in play." This excludes home runs (hence out of the park, not in play), as well as base on balls and strikeouts.
For hitters, BABIP is a "base" for constructing batting averages. The average BABIP given up by a pitcher is something like .300. Most batters have averages below .300 because they strike out a lot. That gives them fewer chances to apply that ".300" average to balls in play, while the strikeouts are in the denominator of the batting average. On the other hand, home runs are "free" hits that do not count in the BABIP calculation, but does improve the batting average.
The assumption of a .300 BABIP is also critical in computing pitchers' field independent pitching statistics (FIP).
The formula is 3.00 +(13*HR+ 3*Walks-2*KO)/IP, with the "constant" 3.00 assuming a .300 BABIP.
That is, if a pitcher gave up no home runs and no walks, and struck out no one, his ERA would be 3.00, because there would be about 12 hits (and 27 outs) in a game, yielding three runs (on average).
All other things being equal, strikeouts reduce a pitcher's ERA, because there are fewer contacted balls to hit. Walks increase a pitcher's ERA because they are "free bases," as do home runs "free runs," that don't "run the gauntlet" of bat to ball to field.