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A game-level analysis of salary dispersion and team performance in the national basketball association

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  • Hajime Katayama
  • Hudan Nuch

Abstract

Using game-level panel data on the National Basketball Association (NBA), we examine the causal effect of within-team salary dispersion on team performance. We exploit three measures of salary dispersion and examine the effect at three levels: whether the outcome of the game is influenced by salary dispersion among (1) players participating in the current game (active players), (2) players who played more than half of their team's games in a season (regular and occasional players) and (3) the entire player population. Regardless of the measures used, we find that salary dispersion does not influence team performance.

Suggested Citation

  • Hajime Katayama & Hudan Nuch, 2011. "A game-level analysis of salary dispersion and team performance in the national basketball association," Applied Economics, Taylor & Francis Journals, vol. 43(10), pages 1193-1207.
    • Handle: RePEc:taf:applec:v:43:y:2011:i:10:p:1193-1207
    DOI: 10.1080/00036840802600335
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    2. Tao, Yu-Li & Chuang, Hwei-Lin & Lin, Eric S., 2016. "Compensation and performance in Major League Baseball: Evidence from salary dispersion and team performance," International Review of Economics & Finance, Elsevier, vol. 43(C), pages 151-159.
    3. Li, Yongjun & Wang, Lizheng & Li, Feng, 2021. "A data-driven prediction approach for sports team performance and its application to National Basketball Association," Omega, Elsevier, vol. 98(C).
    4. Alessandro Bucciol & Marco Piovesan, 2012. "Pay Dispersion and Work Performance," Harvard Business School Working Papers 12-075, Harvard Business School.
    5. Simmons, Rob & Berri, David J., 2011. "Mixing the princes and the paupers: Pay and performance in the National Basketball Association," Labour Economics, Elsevier, vol. 18(3), pages 381-388, June.
    6. Boon L. Lee & Andrew C. Worthington, 2013. "A note on the ‘Linsanity’ of measuring the relative efficiency of National Basketball Association guards," Applied Economics, Taylor & Francis Journals, vol. 45(29), pages 4193-4202, October.
    7. Dennis Coates & Petr Parshakov, 2016. "Team Vs. Individual Tournaments: Evidence From Prize Structure In Esports," HSE Working papers WP BRP 138/EC/2016, National Research University Higher School of Economics.
    8. Takuma Kamada & Hajime Katayama, 2014. "Team performance and within-team salary disparity: an analysis of nippon professional baseball," Economics Bulletin, AccessEcon, vol. 34(1), pages 144-151.
    9. Alessandro Bucciol & Nicolai J Foss & Marco Piovesan, 2014. "Pay Dispersion and Performance in Teams," PLOS ONE, Public Library of Science, vol. 9(11), pages 1-16, November.
    10. Nikolaos, Chatzistamoulou & Theodoros, Antonakis & Konstantinos, Kounetas, 2020. "Salary cap and National Basketball Association teams' productive performance. A two stage Data Envelopment Analysis approach under a metatechnology framework," MPRA Paper 98811, University Library of Munich, Germany.
    11. Caruso, Raul & Carlo, Bellavite Pellegrini & Marco, Di Domizio, 2016. "Does diversity in the payroll affect soccer teams’ performance? Evidence from the Italian Serie A," MPRA Paper 75644, University Library of Munich, Germany.
    12. Nikos Chatzistamoulou & Kounetas Kostas & Antonakis Theodor, 2022. "Salary Cap, Organizational Gap, and Catch-up in the Performance of NBA Teams: A Two-Stage DEA Model Under Heterogeneity," Journal of Sports Economics, , vol. 23(2), pages 123-155, February.
    13. Szymanski, Stefan & Wilkinson, Guy, 2016. "Testing the O-Ring theory using data from the English Premier League," Research in Economics, Elsevier, vol. 70(3), pages 468-481.
    14. Carlo Bellavite Pellegrini & Raul Caruso & Marco Di Domizio, 2021. "Relative wages, payroll structure and performance in soccer. Evidence from Italian Serie A (2007-2019)," DISCE - Quaderni del Dipartimento di Politica Economica dipe0015, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    15. Anna Bykova & Dennis Coates, 2020. "Does Experience Matter? Salary Dispersion, Coaching, And Team Performance," Contemporary Economic Policy, Western Economic Association International, vol. 38(1), pages 188-205, January.
    16. Brian Hill, 2018. "Shadow and Spillover Effects of Competition in NBA Playoffs," Journal of Sports Economics, , vol. 19(8), pages 1067-1092, December.
    17. Cheolbeom Park, 2023. "Optimal salary inequality for team performance: evidence from National Football League data," Applied Economics, Taylor & Francis Journals, vol. 55(24), pages 2773-2787, May.
    18. Chaohai Shen & Tong Sheng & Xingheng Shi & Bingquan Fang & Xiaoqian Lu & Xiaolan Zhou, 2022. "The Relationship between Housing Price, Teacher Salary Improvement, and Sustainable Regional Economic Development," Land, MDPI, vol. 11(12), pages 1-21, December.
    19. Anna Bykova & Dennis Coates, 2022. "Professional team sporting success: do economic and personal freedom provide competitive advantages?," Economics of Governance, Springer, vol. 23(3), pages 323-358, December.
    20. Philippe Cyrenne, 2018. "Salary Inequality, Team Success, League Policies, And The Superstar Effect," Contemporary Economic Policy, Western Economic Association International, vol. 36(1), pages 200-214, January.
    21. Marco Di Domizio & Carlo Bellavite Pellegrini & Raul Caruso, 2022. "Payroll dispersion and performance in soccer: A seasonal perspective analysis for Italian Serie A (2007–2021)," Contemporary Economic Policy, Western Economic Association International, vol. 40(3), pages 513-525, July.
    22. Dennis Coates & Bernd Frick & Todd Jewell, 2016. "Superstar Salaries and Soccer Success," Journal of Sports Economics, , vol. 17(7), pages 716-735, October.
    23. Thadeu Gasparetto & Angel Barajas, 2022. "Wage Dispersion and Team Performance: The Moderation Role of Club Size," Journal of Sports Economics, , vol. 23(5), pages 548-566, June.
    24. Philippe Cyrenne, 2014. "Salary Inequality, Team Success and the Superstar Effect," Departmental Working Papers 2014-02, The University of Winnipeg, Department of Economics.
    25. Frank TENKORANG & Bree L. DORITY & Eddery LAM, 2014. "Nba Endgame: Do Salaries Matter?," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 14, pages 51-62, December.

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