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Early Entry in the NBA Draft

Author

Listed:
  • Peter A. Groothuis

    (Appalachian State University)

  • James Richard Hill

    (Central Michigan University)

  • Timothy J. Perri

    (Appalachian State University)

Abstract

In an influential article, “Unraveling in Matching Markets,"Li and Rosen (1998) note that the first 7 picks, and 17 among 29 first-round selections, of the 1997 National Basketball Association (NBA) draft were not college seniors. By 2004, the first pick was a high school senior, and 25 of the first 29 picks were not college seniors. We suggest that recent NBA contract provisions implemented to slow the early entry of talented players have instead provided additional incentives to both players and firms for early entry into the NBA. We explore two competing models that predict why teams choose a talented player sooner in the new rookie contract system: the human capital model and Lazear's option value model. To test why unraveling occurs, we use a panel study of all NBA players for 12 years, from 1989 through 2002.

Suggested Citation

  • Peter A. Groothuis & James Richard Hill & Timothy J. Perri, 2007. "Early Entry in the NBA Draft," Journal of Sports Economics, , vol. 8(3), pages 223-243, June.
    • Handle: RePEc:sae:jospec:v:8:y:2007:i:3:p:223-243
    DOI: 10.1177/1527002505281228
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    References listed on IDEAS

    as
    1. Roth, Alvin E, 1991. "A Natural Experiment in the Organization of Entry-Level Labor Markets: Regional Markets for New Physicians and Surgeons in the United Kingdom," American Economic Review, American Economic Association, vol. 81(3), pages 415-440, June.
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    6. 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.
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    Cited by:

    1. Wangrow, David B. & Schepker, Donald J. & Barker, Vincent L., 2018. "Power, performance, and expectations in the dismissal of NBA coaches: A survival analysis study," Sport Management Review, Elsevier, vol. 21(4), pages 333-346.
    2. Barbara Arel & Michael J. Tomas III, 2012. "The NBA Draft," Journal of Sports Economics, , vol. 13(3), pages 223-249, June.
    3. Wen-Jhan Jane, 2021. "The impact of cultural distance on salary: the case of Samurai Japan," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 11(1), pages 85-123, March.
    4. Akira Motomura & Kelsey V. Roberts & Daniel M. Leeds & Michael A. Leeds, 2016. "Does It Pay to Build Through the Draft in the National Basketball Association?," Journal of Sports Economics, , vol. 17(5), pages 501-516, June.
    5. W. David Allen, 2015. "The Demand for Younger and Older Workers," Journal of Sports Economics, , vol. 16(2), pages 127-158, February.
    6. Dennis Coates & Babatunde Oguntimein, 2010. "The Length and Success of NBA Careers: Does College Production Predict Professional Outcomes?," International Journal of Sport Finance, Fitness Information Technology, vol. 5(1), pages 4-26, February.
    7. Daniel M. Leeds & Michael A. Leeds & Akira Motomura, 2015. "Are Sunk Costs Irrelevant? Evidence From Playing Time In The National Basketball Association," Economic Inquiry, Western Economic Association International, vol. 53(2), pages 1305-1316, April.
    8. Richard J. Paulsen, 2022. "Peer effects and human capital accumulation: Time spent in college and productivity in the National Basketball Association," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3611-3619, December.
    9. Jeff Borland & Mark Chicu & Robert D. Macdonald, 2009. "Do Teams Always Lose to Win? Performance Incentives and the Player Draft in the Australian Football League," Journal of Sports Economics, , vol. 10(5), pages 451-484, October.
    10. Heather Mitchell & Constantino Stavros & Mark F. Stewart, 2011. "Does the Australian Football League Draft Undervalue Indigenous Australian Footballers?," Journal of Sports Economics, , vol. 12(1), pages 36-54, February.
    11. Brent A. Evans & Joshua D. Pitts & Chris Clark, 2021. "Is the NBA Summer League Predictive of Performance for NBA Rookies?," Journal of Sports Economics, , vol. 22(2), pages 164-182, February.
    12. Richard J. Paulsen & Olivia Boucot, 2023. "Playing in a pandemic: The impact of family on performance in the NBA's “bubble”," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(4), pages 2102-2109, June.
    13. Akira Motomura, 2016. "MoneyRoundball? The Drafting of International Players by National Basketball Association Teams," Journal of Sports Economics, , vol. 17(2), pages 175-206, February.
    14. Tobias Berger & Frank Daumann, 2021. "Anchoring bias in the evaluation of basketball players: A closer look at NBA draft decision‐making," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(5), pages 1248-1262, July.
    15. Rodenberg Ryan & Kim Jun Woo, 2012. "Testing the On-Court Efficacy of the NBA's Age Eligibility Rule," Journal of Quantitative Analysis in Sports, De Gruyter, vol. 8(2), pages 1-23, June.
    16. Brad R. Humphreys & Yulia Chikish & Peter von Allmen, 2024. "Should I Stay or Should I Go Pro? Early NFL Draft Entry by NCAA FBS Underclassmen," Journal of Sports Economics, , vol. 25(3), pages 346-368, April.

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