In the National Basketball Association (NBA), as in most professional sports leagues, player turnover is high from season to season due to declining skills as players age. In our analysis, we ask: Are there any factors that determine the duration of players with any consistency? Is the position in which a player was selected in the draft a significant indicator of duration? Is there any exit discrimination in the career duration where black players have shorter careers than white players?
We examine the determinants of player duration using data covering the 1989-99 period. The data include individual player performance statistics on a season-to-season basis as well as biographical player data on height, weight, race, and draft number. Our model differs from the only previous study on duration in the NBA in that our estimation technique allows for the use of a mixed stock and flow sample. Our time period is also longer than the previous study.
Sports economics has provided a rich field of study for labor economists to explore issues of discrimination. Professional baseball has attracted much of the attention of researchers. Scully (1974) found evidence of barriers to entry for black athletes in professional baseball using data from 1960-71 and evidence of pay discrimination using data from the late 1960s. Hill and Spellman (1984) found no evidence of pay discrimination or barriers to entry using data from the 1976-77 period. Subsequent studies with later data confirmed the lack of discrimination in baseball. Cymrot (1985) suggested that free agency was responsible for this turn of events; according to Kahn (1991, 402) the reasons for the reversal of outcomes are unclear.
Kahn and Sherer (1988) were the first to offer credible evidence of salary discrimination against African American professional basketball players. Despite 75% of the players in the league being black, data from regressions using 1985-86 salaries suggested a 20% shortfall in compensation for African American players, ceteris paribus. The results of other researchers using data from the same time period confirmed the conclusions. The source of the discrimination was found to be fans by Kahn and Sherer (1988, 56-57), Burdekin and Idson (1991), and Brown et al. (1991, 337). Again, however, just as in the case for baseball, studies by Hamilton (1997), Dey (1997), and Gius and Johnson (1998) with newer salary data failed to find evidence of salary discrimination in the NBA. Despite these findings, Kanazawa and Funk (2001) still found the existence of customer discrimination in the cable television Nielsen ratings during the 1996-97 season.
In addition to salary discrimination, labor economists have focused on both entry and exit discrimination. For instance, Kahn and Sherer (1988, 53-55) found no evidence of hiring discrimination in the NBA, but Brown et al. (1991, 33943) found only weak evidence that black players had to outperform whites for entry into the league. In addition, Johnson and Marple (1973) using data from 1970 and Hoang and Rascher (1999, 78) using data from the 1980s, both find evidence that white players have a lower probability of being cut from the league. Hoang and Rascher (1999, 87-88) find that the effect of "exit discrimination" on career earnings in the NBA is larger than the effects of the previously documented wage discrimination.
The problem with both of the previous studies on exit discrimination is that neither has the ability to analyze long careers in the NBA. For instance, the Johnson and Marple study only analyzed the career of benchwarmers in the 1970 season. Hoang and Rascher use a panel study of flow data that only allows for career length up to nine years, the length of their panel. In our study, we analyze exit discrimination by utilizing a combination of stock and flow sample data from the 1990s that allows us to address both long and short careers. …