Racial Differences in Professional Basketball Players' Compensation

Lawrence Kahn and Peter D Sherer

Journal of Labor Economics, 1988, vol. 6, issue 1, 40-61

Abstract: This article investigates racial differences in 1985-86 salaries of individual professio nal basketball players. White and black players earn similar mean com pensation; however, controlling for a variety of productivity and mar ket-related variables and for the endogeneity of player draft positio n, the authors find a significant ceteris paribus black compensation shortfall of about 20 percent. Further, they find that all else equal , including team performance and market factors, replacing one black player with an identical white player raises home attendance by 8,000 to 13,000 fans per season. The compensation and attendance results t ogether are consistent with the idea of customer discrimination. Copyright 1988 by University of Chicago Press.

Date: 1988
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