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The New NBA Collective Bargaining Agreement, the Median Voter Model, and a Robin Hood Rent Redistribution

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Author Info

  • J. Richard Hill

    (Central Michigan University)

  • Peter A. Groothuis

    (Westminster College)

Abstract

In this article, it is suggested that the new collective bargaining agreement (CBA) in the National Basketball Association (NBA) redistributes rents from the superstars back to the median voters. In particular, it is suggested that portions of the new agreement, such as salary caps, are designed to improve the rather skewed distribution of salaries in the NBA. Evidence from a Lorenz curve analysis of the first 2 years under the new contract suggests that all players with salaries below the median wage gain from the new agreement, and those with salaries closest to the median wage gain the most. The analysis suggests that skewed salary distributions may lead to CBAs that redistribute the rents from the rich (superstars) to the poor (median voters).

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Bibliographic Info

Article provided by in its journal Journal of Sports Economics.

Volume (Year): 2 (2001)
Issue (Month): 2 (May)
Pages: 131-144

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Handle: RePEc:sae:jospec:v:2:y:2001:i:2:p:131-144

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Cited by:
  1. Richard C. K. Burdekin & Richard T. Hossfeld & Janet Kiholm Smith, 2005. "Are NBA Fans Becoming Indifferent to Race? Evidence From the 1990s," Journal of Sports Economics, , vol. 6(2), pages 144-159, May.
  2. Simmons, Rob & Berri, David J., 2011. "Mixing the princes and the paupers: Pay and performance in the National Basketball Association," Labour Economics, Elsevier, vol. 18(3), pages 381-388, June.
  3. repec:lan:wpaper:3944 is not listed on IDEAS
  4. Dietl Helmut M & Duschl Tobias & Lang Markus, 2011. "Executive Pay Regulation: What Regulators, Shareholders, and Managers Can Learn from Major Sports Leagues," Business and Politics, De Gruyter, vol. 13(2), pages 1-32, August.
  5. Helmut Dietl & Tobias Duschl & Markus Lang, 2010. "Gehaltsobergrenzen und Luxussteuern: Erkenntnisse aus dem professionellen Mannschaftssport," Working Papers 0039, University of Zurich, Center for Research in Sports Administration (CRSA).
  6. repec:lan:wpaper:3551 is not listed on IDEAS
  7. David Berri & R. Jewell, 2004. "Wage inequality and firm performance: Professional basketball's natural experiment," Atlantic Economic Journal, International Atlantic Economic Society, vol. 32(2), pages 130-139, June.
  8. repec:lan:wpaper:3659 is not listed on IDEAS
  9. R Simmons & D J Berri, 2010. "Mixing the princes and the paupers: Pay and performance in the National Basketball Association," Working Papers 611523, Lancaster University Management School, Economics Department.
  10. Pelnar, Gregory, 2007. "Antitrust Analysis of Sports Leagues," MPRA Paper 5382, University Library of Munich, Germany.
  11. Erick Eschker & Stephen Perez & Mark Siegler, 2004. "The NBA and the influx of international basketball players," Applied Economics, Taylor & Francis Journals, vol. 36(10), pages 1009-1020.

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