216 R.E. McCormick, R.D. Tollison J. of Economic Behavior Org. 44 2001 201–219
7. Odds and ends
In 1985–1986 the NBA instituted a salary cap. This restriction limits the total wage bill that a team can pay to its players. The limit has varied slightly from team to team based on
a number of factors, but it was approximately US 53 million per year until the most recent 1999 CBA. We reestimated the minutes played equation Table 5 allowing for different
race coefficients in the two periods, the years without a salary cap 1980–1985 and the subsequent period.
First, the marginal minutes played per game for all players is lower after the salary cap. Since the total minutes played by the team is constant in the two periods, this suggests
that one important impact of the salary cap is that each player plays less. In turn, this suggests that there is more turnover and more players playing with a salary cap than without. This
conjecture is verified by the t test of the number of players on the team in the two periods. In the no salary cap period, the average number of players on a team was 13.48. After the
institution of the cap, the average number of players on a team during a season increased to 14.2. The difference between these two averages is significant at the 1 percent level.
27
The change in minutes played associated with the introduction of the salary cap was not race-neutral. In the minutes-played equation, the coefficient on black playing time is
now 0.673 more minutes played per game than whites in the salary cap period. However, in the earlier period with no pay restriction, the difference is 0.974. Both coefficients are
statistically significant from zero. The salary cap is associated with a smaller black-white playing time differential. Blacks play more than whites, and the salary cap reduced this
difference, but not in a statistically significant way.
Lindsay and Maloney 1988 have advanced a sorting hypothesis about gender discrim- ination. They argue that if workers are gender biased, that is, men do not like to work with
women andor vice versa, and markets are thick, firms should sort plants and work facilities on gender basis to avoid the costs of having to pay men to work with women and vice-versa.
Following this argument, if basketball fans are racially biased, then in large markets, where there are multiple NBA teams, the owners should separate the audience and specialize in
one type team. For instance, there are two NBA teams in the New York City area, the Knicks and the Nets. If New York area fans are racially biased, both teams can benefit if one
caters to white fans and the other to black fans. So if fans are biased, we ought to observe differences in the racial composition of teams in the same market. Besides New York, only
Los Angeles has two NBA teams, the Lakers and the Clippers since 1984–85.
In Table 10, the average absolute differences in minutes played and players in New York are 0.21 and 0.15, respectively. Both of these are significant at the 5 percent level. The New
York market is sorted over this period. Table 11 repeats this exercise for Los Angeles. The means of the absolute differences in minutes and players are 0.21 and 0.08. The former
is significant at the 10 percent level while the latter is not. Overall, combining the data
27
With the salary cap, average salaries have still increased faster then the wage rate of entry-level jobs, and given high salaries, guaranteed contracts, and the continued existence of minor leagues and leagues in Europe, it might
be that teams are less inclined to play injured players as often. Thus, the salary cap result might just reflect higher salaries and fixed contracts.
R.E. McCormick, R.D. Tollison J. of Economic Behavior Org. 44 2001 201–219 217
Table 10 Racial composition of NBA teams in New York
Season Knicks
Nets Absolute difference
Minutes played ratio
a
Player ratio
a
Minutes played ratio
Player ratio
Minutes Players
1980–1981 0.0
0.0 0.73
0.40 0.73
0.40 1981–1982
0.11 0.17
0.19 0.27
0.08 0.11
1982–1983 0.21
0.20 0.12
0.17 0.09
0.03 1983–1984
0.08 0.20
0.17 0.20
0.09 1984–1985
0.19 0.30
0.39 0.40
0.20 0.2
1985–1986 0.23
0.14 0.27
0.33 0.04
0.03 1986–1987
0.07 0.24
0.31 0.45
0.23 0.31
1987–1988 0.09
0.24 0.29
0.33 0.19
0.10
a
Ratio of total minutes played by whites to total minutes played by blacks and the ratio of the number of white players to the number of black players over the whole season.
Table 11 Racial composition of NBA teams in Los Angeles
Season Clippers
Lakers Absolute difference
Minutes played ratio
a
Player ratio
a
Minutes played ratio
Player ratio
Minutes Players
1984–1985 0.10
0.18 0.13
0.20 0.03
0.02 1985–1986
0.12 0.15
0.14 0.30
0.02 0.15
1986–1987 0.10
0.14 0.12
0.30 0.03
0.16 1987–1988
0.18 0.24
0.07 0.23
0.11 0.00
a
Ratio of total minutes played by whites to total minutes played by blacks and the ratio of the number of white players to the number of black players over the whole season.
from both cities, the means are 0.15 and 0.13, respectively, and both are significant at the 5 percent level.
Perhaps the best interpretation of these results is that New York is sorted and Los Angeles is not. There is, nonetheless, some evidence to suggest racial preferences by fans in large
markets where the sorting hypothesis is most relevant.
8. Concluding remarks
