NBA ENDGAME: DO SALARIES MATTER?

Frank Tenkorang (), Bree L. Dority () and Eddery Lam ()
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Frank Tenkorang: Department of Economics, University of Nebraska-Kearney, Kearney, NE 68849, USA
Bree L. Dority: Department of Economics, University of Nebraska-Kearney, Kearney, NE 68849, USA

Review of Economic and Business Studies, 2014, issue 14, 51-62

Abstract: This paper estimates the association between salary dispersion and the probability that an NBA team leading two minutes before the end of a playoff game won the game. Economic theory indicates the a priori relationship is ambiguous and the existing empirical literature finds mixed results as to the direction of the relationship. We use game-level data from the 2012 and 2013 NBA playoffs and allow the association to be nonlinear. Overall, our results indicate there may be U-shaped relationship between salary dispersion and win probabilities; however, the point estimates individually and jointly are not statistically significant. Thus, we conclude there is no evidence in our sample that salary dispersion and NBA win probabilities are related.

Keywords: Salary dispersion; labor economics; National Basketball Association (search for similar items in EconPapers)
JEL-codes: D2 J3 (search for similar items in EconPapers)
Date: 2014
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