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Are NBA Fans Becoming Indifferent to Race? Evidence from the 1990s

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Author Info

  • Richard C.K. Burdekin

    (Claremont McKenna College)

  • Richard T. Hossfeld

    (Duke University School of Law)

  • Janet K. Smith

    (Claremont McKenna College)

Abstract

Previous studies, using data from the 1980s, found that racial composition of NBA teams is positively correlated with racial composition of the metropolitan markets in which the teams are located. Researchers have interpreted this evidence as consistent with a "customer discrimination" hypothesis. We reconsider this hypothesis by examining evidence from the 1990s and generate three principal findings. First, based on player performance statistics, we find no evidence of discrimination at the league level--that is, the best players appear to be playing in the league regardless of race. Second, players, categorized by race, are not randomly distributed across teams. Instead, the relationship between team racial composition and metropolitan area racial composition, while weaker than in the 1980s, persists in the NBA in the 1990s. Hence, teams located in areas with greater concentration of white population may find it revenue enhancing to cater to customer demand for viewing teams that include white players. Our third finding, based on revenue from home game attendance, is that as the number of white players declined significantly over the decade, the revenue product of a white player increased on the margin. This effect appears to be more pronounced for teams located in cities with larger white populations. We also find evidence that, in recent years, the top-performing white players in the NBA tend to locate in cities with larger white populations, suggesting that teams in these cities place a higher marginal value on such players.

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Bibliographic Info

Paper provided by Claremont Colleges in its series Claremont Colleges Working Papers with number 2002-12.

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Date of creation: Aug 2002
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Handle: RePEc:clm:clmeco:2002-12

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Keywords: Customer Discrimination; Race; Sports; National Basketball Association;

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References

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  1. Nardinelli, Clark & Simon, Curtis, 1990. "Customer Racial Discrimination in the Market for Memorabilia: The Case of Baseball," The Quarterly Journal of Economics, MIT Press, vol. 105(3), pages 575-95, August.
  2. Robert Brown & R. Jewell, 1995. "Race, revenues, and college basketball," The Review of Black Political Economy, Springer, vol. 23(3), pages 75-90, March.
  3. J. Richard Hill & Peter A. Groothuis, 2001. "The New NBA Collective Bargaining Agreement, the Median Voter Model, and a Robin Hood Rent Redistribution," Journal of Sports Economics, , vol. 2(2), pages 131-144, May.
  4. Bodvarsson, Orn B. & Partridge, Mark D., 2001. "A supply and demand model of co-worker, employer and customer discrimination," Labour Economics, Elsevier, vol. 8(3), pages 389-416, June.
  5. Hoang, Ha & Rascher, Dan, 1999. "The NBA, Exit Discrimination, and Career Earnings," MPRA Paper 3542, University Library of Munich, Germany.
  6. Örn B. Bodvarsson & Raymond T. Brastow, 1999. "A Test Of Employer Discrimination In The Nba," Contemporary Economic Policy, Western Economic Association International, vol. 17(2), pages 243-255, 04.
  7. Harry J. Holzer & Keith R. Ihlanfeldt, 1998. "Customer Discrimination And Employment Outcomes For Minority Workers," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 835-867, August.
  8. Mark Gius & Donn Johnson, 1998. "An empirical investigation of wage discrimination in professional basketball," Applied Economics Letters, Taylor & Francis Journals, vol. 5(11), pages 703-705.
  9. Kanazawa, Mark T & Funk, Jonas P, 2001. "Racial Discrimination in Professional Basketball: Evidence from Nielsen Ratings," Economic Inquiry, Western Economic Association International, vol. 39(4), pages 599-608, October.
  10. Kahn, Lawrence M & Sherer, Peter D, 1988. "Racial Differences in Professional Basketball Players' Compensation," Journal of Labor Economics, University of Chicago Press, vol. 6(1), pages 40-61, January.
  11. McCormick, Robert E. & Tollison, Robert D., 2001. "Why do black basketball players work more for less money?," Journal of Economic Behavior & Organization, Elsevier, vol. 44(2), pages 201-219, February.
  12. Lawrence M. Kahn, 2000. "The Sports Business as a Labor Market Laboratory," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 75-94, Summer.
  13. Hofler, Richard A. & Payne, James E., 1997. "Measuring efficiency in the National Basketball Association1," Economics Letters, Elsevier, vol. 55(2), pages 293-299, August.
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Cited by:
  1. D Berri & R Simmons, 2007. "Race and the evaluation of signal callers in the national football league," Working Papers 591147, Lancaster University Management School, Economics Department.
  2. repec:ebl:ecbull:v:4:y:2007:i:34:p:1-7 is not listed on IDEAS
  3. Cassey Lee, 2007. "A Cheap Ticket to the Dance: Systematic Bias in College Basketball's Ratings Percentage Index," Economics Bulletin, AccessEcon, vol. 4(34), pages 1-7.
  4. Tainsky, Scott & Mills, Brian & Winfree, Jason A., 2012. "Further Examination of Potential Discrimination Among MLB Umpires," MPRA Paper 43234, University Library of Munich, Germany.

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