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Differing Rates of Return to Performance

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  • Patrick James Rishe

    (Webster University)

Abstract

Recent academic literature has argued that there is no gender discrimination in professional golf and that the gender earnings gap is due to differences in average skill levels. This article examines whether the earnings gap between Professional Golf Association (PGA) and Senior Tour golfers is due to differences in average skill levels or the rates of return to these skills. Data used are from the 1999 professional golf season. OLS estimation, interaction terms, Oaxaca’s decomposition procedure, and gap analysis are employed to investigate this question. The results suggest that the primary source of the earnings gap between PGA and Senior Tour golfers is differences in the rates of return to performance. Although there are plausible explanations for why these differences in coefficients exist, the presence of age discrimination cannot be dismissed.

Suggested Citation

  • Patrick James Rishe, 2001. "Differing Rates of Return to Performance," Journal of Sports Economics, , vol. 2(3), pages 285-296, August.
    • Handle: RePEc:sae:jospec:v:2:y:2001:i:3:p:285-296
    DOI: 10.1177/152700250100200307
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    References listed on IDEAS

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    1. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    2. Ronald G. Ehrenberg & Michael L. Bognanno, 1990. "The Incentive Effects of Tournaments Revisited: Evidence from the European PGA Tour," ILR Review, Cornell University, ILR School, vol. 43(3), pages 74, April.
    3. Ehrenberg, Ronald G & Bognanno, Michael L, 1990. "Do Tournaments Have Incentive Effects?," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1307-1324, December.
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    Cited by:

    1. Stephen Shmanske, 2007. "Consistency or Heroics: Skewness, Performance, and Earnings on the PGA TOUR," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 35(4), pages 463-471, December.
    2. Ferdi Botha & Gavin Fraser & Thomas A. Rhoads, 2021. "Skill and Earnings Amongst Golfers on the Southern‐African Sunshine Tour," South African Journal of Economics, Economic Society of South Africa, vol. 89(2), pages 274-281, June.
    3. Harold Fried & Loren Tauer, 2011. "The impact of age on the ability to perform under pressure: golfers on the PGA tour," Journal of Productivity Analysis, Springer, vol. 35(1), pages 75-84, February.
    4. Thomas A. Rhoads, 2007. "Labor Supply on the PGA TOUR," Journal of Sports Economics, , vol. 8(1), pages 83-98, February.
    5. Ilhyeok Park & Young Hoon Lee, 2012. "Efficiency Comparison of International Golfers in the LPGA," Journal of Sports Economics, , vol. 13(4), pages 378-392, August.
    6. Donald L. Alexander & William Kern, 2005. "Drive for Show and Putt for Dough?," Journal of Sports Economics, , vol. 6(1), pages 46-60, February.
    7. Scott J. Callan & Janet M. Thomas, 2007. "Modeling the Determinants of a Professional Golfer's Tournament Earnings," Journal of Sports Economics, , vol. 8(4), pages 394-411, August.
    8. Stephen Shmanske, 2008. "Skills, Performance, and Earnings in the Tournament Compensation Model," Journal of Sports Economics, , vol. 9(6), pages 644-662, December.
    9. Stephen Shmanske, 2013. "Gender and skill convergence in professional golf," Chapters, in: Eva Marikova Leeds & Michael A. Leeds (ed.), Handbook on the Economics of Women in Sports, chapter 4, pages 73-91, Edward Elgar Publishing.

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