Author (Your Name)

Kathleen Carney, Colby College

Date of Award


Document Type

Honors Thesis (Open Access)


Colby College. Economics Dept.


Randy A. Nelson


Over the past thirty years, economists have become increasingly interested in the labor market for professional sports. These studies have focused primarily on exploitation, the difference between marginal revenue product and salary, or discrimination, salary differentials based on race, or ethnic background. This paper attempts to combine both areas of research, that is, to explain the systematic deviation of marginal revenue product from salary as a function of race, or ethnic background. Using NBA data collected over three seasons 1995-98, we specify a three-equation model, an enhancement of the Scully two-step method presented in 1976. We then ask if players are paid a salary equal to the revenue they generate, and if not, can the resulting differential be explained using a dummy variable for race and ethnic background.


National Basketball Association, Professional sports -- Economic aspects -- United States, Professional sports -- Social aspects -- United States, Basketball players -- Salaries, etc.

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Economics Commons