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Racial discrimination and professional basketball salaries in the 1990s

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  • Barton Hughes Hamilton

Abstract

Racial differences in professional basketball player salaries are examined to determine whether the 20% premium paid to whites in the mid-1980s has persisted into the 1990s. OLS and tobit regressions indicate no difference between white and black salaries, controlling for player and team characteristics for the 1994 - 95 season. However, censored quantile regressions show substantial racial differences at certain points in the salary distribution. Whites earn less than blacks at the lower end of the distribution, although the difference is not statistically significant, and varies with minutes played. In contrast, whites receive a significant premium (18%) at the upper end of the salary distribution. These findings are consistent with a form of consumer discrimination in which sports fans prefer to see white star players, all else equal.

Suggested Citation

  • Barton Hughes Hamilton, 1997. "Racial discrimination and professional basketball salaries in the 1990s," Applied Economics, Taylor & Francis Journals, vol. 29(3), pages 287-296.
  • Handle: RePEc:taf:applec:v:29:y:1997:i:3:p:287-296
    DOI: 10.1080/000368497327065
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    1. > Industrial Organization > Industry studies > Sports, recreation and tourism > Sports

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    Cited by:

    1. Franziska Prockl & Bernd Frick, 2018. "Wage Determination In A Regulated Labor Market: Empirical Evidence From Major League Soccer," Working Papers Dissertations 39, Paderborn University, Faculty of Business Administration and Economics.
    2. Quinn Andrew Wesley Keefer, 2013. "Compensation Discrimination for Defensive Players," Journal of Sports Economics, , vol. 14(1), pages 23-44, February.
    3. Bryson, Alex & Chevalier, Arnaud, 2015. "Is there a taste for racial discrimination amongst employers?," Labour Economics, Elsevier, vol. 34(C), pages 51-63.
    4. Lawrence M. Kahn, 2009. "The Economics of Discrimination: Evidence from Basketball," NCER Working Paper Series 40, National Centre for Econometric Research.
    5. Alex Bryson & Bernd Frick & Rob Simmons, 2009. "The Returns to Scarce Talent: Footedness and Player Remuneration in European Soccer," CEP Discussion Papers dp0948, Centre for Economic Performance, LSE.
    6. Benno Torgler & Sascha Schmidt, 2007. "What shapes player performance in soccer? Empirical findings from a panel analysis," Applied Economics, Taylor & Francis Journals, vol. 39(18), pages 2355-2369.
    7. David J. Berri & Brad R. Humphreys & Robert Simmons, 2013. "Valuing the blind side: pay and performance of offensive linemen in the National Football League," Chapters, in: Plácido Rodríguez & Stefan Késenne & Jaume García (ed.), The Econometrics of Sport, chapter 6, pages 99-114, Edward Elgar Publishing.
    8. Eric Stone & Ronald Warren, 1999. "Customer discrimination in professional basketball: evidence from the trading-card market," Applied Economics, Taylor & Francis Journals, vol. 31(6), pages 679-685.
    9. 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.
    10. Hisahiro Naito & Yu Takagi, 2017. "Is there A Positive Association between Increasing Salary Discrimination in the NBA and Unshrinking Racial Income Gap of White and Black Citizens ?," Tsukuba Economics Working Papers 2017-001, Economics, Graduate School of Humanities and Social Sciences, University of Tsukuba.
    11. Candon Johnson & Joshua Hall, 2018. "Do National Basketball Association players need higher salaries to play in high tax states? Evidence from free agents," Applied Economics Letters, Taylor & Francis Journals, vol. 25(5), pages 359-361, March.
    12. Venkat Kuppuswamy & Peter Younkin, 2020. "Testing the Theory of Consumer Discrimination as an Explanation for the Lack of Minority Hiring in Hollywood Films," Management Science, INFORMS, vol. 66(3), pages 1227-1247, March.
    13. Holmes, Paul, 2011. "New evidence of salary discrimination in major league baseball," Labour Economics, Elsevier, vol. 18(3), pages 320-331, June.
    14. Barry Reilly, 2014. "Labour market discrimination," Chapters, in: John Goddard & Peter Sloane (ed.), Handbook on the Economics of Professional Football, chapter 15, pages 238-258, Edward Elgar Publishing.
    15. Mongeon, Kevin & Winfree, Jason, 2012. "Comparison of television and gate demand in the National Basketball Association," Sport Management Review, Elsevier, vol. 15(1), pages 72-79.
    16. R. Todd Jewell & Robert Brown & Scott Miles, 2002. "Measuring discrimination in major league baseball: evidence from the baseball hall of fame," Applied Economics, Taylor & Francis Journals, vol. 34(2), pages 167-177.
    17. Olugbenga Ajilore, 2014. "Do white NBA players suffer from reverse discrimination?," Economics Bulletin, AccessEcon, vol. 34(1), pages 558-566.
    18. Hofmann, Julian & Schnittka, Oliver & Johnen, Marius & Kottemann, Pascal, 2021. "Talent or popularity: What drives market value and brand image for human brands?," Journal of Business Research, Elsevier, vol. 124(C), pages 748-758.
    19. Alex Bryson & Bernd Frick & Rob Simmons, 2009. "The Returns to Scarce Talent: Footedness and Player Remuneration in European Soccer," CEP Discussion Papers dp0948, Centre for Economic Performance, LSE.
    20. 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, April.
    21. Young Hoon Lee & Ilhyeok Park & Joon-Ho Kang & Younghan Lee, 2013. "An economic analysis of the sudden influx of Korean female golfers into the LPGA," Chapters, in: Eva Marikova Leeds & Michael A. Leeds (ed.), Handbook on the Economics of Women in Sports, chapter 18, pages 388-409, Edward Elgar Publishing.
    22. Jeffrey Chu & Saralees Nadarajah & Emmanuel Afuecheta & Stephen Chan & Ying Xu, 2014. "A statistical study of racism in English football," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(5), pages 2915-2937, September.
    23. Christian Deutscher & Oliver Gürtler & Joachim Prinz & Daniel Weimar, 2017. "The Payoff To Consistency In Performance," Economic Inquiry, Western Economic Association International, vol. 55(2), pages 1091-1103, April.
    24. Goodall, Amanda H. & Kahn, Lawrence M. & Oswald, Andrew J., 2011. "Why do leaders matter? A study of expert knowledge in a superstar setting," Journal of Economic Behavior & Organization, Elsevier, vol. 77(3), pages 265-284, March.

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