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The Collective Bargaining Effects of NBA Player Productivity Dynamics

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  • Turner, Chad
  • Hakes, Jahn Karl

Abstract

We apply quintile regression methodology to player pay and performance data from the 1985-86 to 2005-06 seasons of the National Basketball Association (NBA). In addition to confirming a finding from Hakes and Turner (2007) of systematic bias in pooled OLS regressions of career paths for salary and productivity, the quintile analysis presents two important results regarding NBA salary structure. Unlike Major League Baseball (MLB), the highest ability veteran NBA players suffer salary suppression relative to the lesser-talented players in their debut-year cohort, indicating rents have been transferred from the most able players to players of lesser abilities. Also, while young NBA players in general suffer from salary suppression relative to free agents, as is well-reported in baseball, our regression results show that the highest-ability young players suffer the most salary suppression, and that the effects of the rookie salary cap in the 1995 NBA Collective Bargaining Agreement depressed salaries for young players of all ability levels.

Suggested Citation

  • Turner, Chad & Hakes, Jahn Karl, 2007. "The Collective Bargaining Effects of NBA Player Productivity Dynamics," MPRA Paper 5058, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:5058
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    File URL: https://mpra.ub.uni-muenchen.de/5058/1/MPRA_paper_5058.pdf
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    References listed on IDEAS

    as
    1. Kubatko Justin & Oliver Dean & Pelton Kevin & Rosenbaum Dan T, 2007. "A Starting Point for Analyzing Basketball Statistics," Journal of Quantitative Analysis in Sports, De Gruyter, vol. 3(3), pages 1-24, July.
    2. Scully, Gerald W, 1974. "Pay and Performance in Major League Baseball," American Economic Review, American Economic Association, vol. 64(6), pages 915-930, December.
    3. Krohn, Gregor A, 1983. "Measuring the Experience-Productivity Relationship: The Case of Major League Baseball," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(4), pages 273-279, October.
    4. Ira Horowitz & Christopher Zappe, 1998. "Thanks for the memories: baseball veterans' end-of-career salaries," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 19(6), pages 377-382.
    5. Kahn, Lawrence M, 1993. "Free Agency, Long-Term Contracts and Compensation in Major League Baseball: Estimates from Panel Data," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 157-164, February.
    6. Jahn Hakes & Chad Turner, 2011. "Pay, productivity and aging in Major League Baseball," Journal of Productivity Analysis, Springer, vol. 35(1), pages 61-74, February.
    7. Daniel R. Marburger, 2004. "Arbitrator Compromise in Final Offer Arbitration: Evidence from Major League Baseball," Economic Inquiry, Western Economic Association International, vol. 42(1), pages 60-68, January.
    8. Brad R. Humphreys, 2000. "Equal Pay on the Hardwood: The Earnings Gap between Male and Female NCAA Division I Basketball Coaches," Journal of Sports Economics, , vol. 1(3), pages 299-307, August.
    9. Lawrence M. Kahn, 1991. "Discrimination in Professional Sports: A Survey of the Literature," ILR Review, Cornell University, ILR School, vol. 44(3), pages 395-418, April.
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    More about this item

    Keywords

    career dynamics; pay and productivity; professional basketball;

    JEL classification:

    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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