An empirical investigation of wage discrimination in professional basketball

Abstract

Previous research has shown that wage discrimination may exist in National Basketball Association (NBA) player salaries. These studies have shown that African-Americans earned from nine to twenty per cent less than whites when on-court performance is held constant. The authors could find no substantial research that has been done in this area since 1991. The present study re-examines this issue. Using salary data from the 1996–97 season and performance statistics from the 1995–96 season, a log-linear wage equation was estimated, and a Chow Test was performed. Holding all other factors constant, African-American players do not earn less than white players. The most important factors affecting an NBA player's salary are on-court performance, free agency, experience, and the draft status of the player. These results are important since they indicate that wage discrimination based on race appears to have been eliminated from the NBA.