Salary Inequality, Team Success and the Superstar Effect
Departmental Working Papers from The University of Winnipeg, Department of Economics
In this paper, I examine the relationship between a professional sports team's salary distribution and its performance. I first develop a simple model of a team's salary distribution and then using data from the period covered by the recent Collective Bargaining Agreement between players and owners in the National Hockey League, I examine the relationship between a team's salary distribution and its winning percentage. Using a variety of estimators and a variety of measures to describe the distribution of player salaries on a team, I find that teams with higher relative payrolls and lower salary inequality have higher winning percentages. I also find evidence of a superstar effect, in that teams with a higher maximum player salary have higher winning percentages. The results are sensitive; however, to the particular measure of salary inequality used and the endogeneity of the salary distribution.
Pages: 25 pages
New Economics Papers: this item is included in nep-hrm and nep-spo
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:win:winwop:2014-02
Access Statistics for this paper
More papers in Departmental Working Papers from The University of Winnipeg, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Soham Baksi ().