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The New NBA Collective Bargaining Agreement, the Median Voter Model, and a Robin Hood Rent Redistribution

ASU Author/Contributor (non-ASU co-authors, if there are any, appear on document)
Peter Groothuis Ph.D., Professor (Creator)
Institution
Appalachian State University (ASU )
Web Site: http://www.library.appstate.edu/

Abstract: In this article, it is suggested that the new collective bargaining agreement (CBA) in the National Basketball Association (NBA) redistributes rents from the superstars back to the median voters. In particular, it is suggested that portions of the new agreement, such as salary caps, are designed to improve the rather skewed distribution of salaries in the NBA. Evidence from a Lorenz curve analysis of the first 2 years under the new contract suggests that all players with salaries below the median wage gain from the new agreement, and those with salaries closest to the median wage gain the most. The analysis suggests that skewed salary distributions may lead to CBAs that redistribute the rents from the rich (superstars) to the poor (median voters).

Additional Information

Publication
Hill, J.R. and Groothuis, P.A. (2001), The New NBA Collective Bargaining Agreement, The Median Voter Model and a Robin-Hood Rent Redistribution. Journal of Sports Economics, 2(2): 131-144 (May 2001). Published by SAGE. doi:10.1177/152700250100200203
Language: English
Date: 2001