Race discrimination in the NBA, alas I have long suspected this

Here is part of the abstract:

Weighted quantile regressions show evidence of consumer discrimination in that black players with high audience visibility (role and star players) experience a larger racial wage gap. The size of the share of the white population is shown to be positively correlated with the racial wage gap. No employee nor employer discrimination is found.

And:

Black players receive on average 20.5% less than their counterparts, all else equal.

Here is the paper by Candon Johnson and Eduardo Munici, via the excellent Kevin Lewis.

Comments

How many white players are even left in the NBA? A tiny sample of contracts based on desperate need of one final shooter (Reddick, probably Korver), or charity/loyalty (guys like Ginobilli and Nowitzki) or bizarre timing (Mozgov) could already account for a huge gap in the numbers.

The paper says around 75% of NBA players are black, not exactly a tiny sample

The question was the percentage of white players. From the fountain of all knowledge (wikipedia): "During the entire 1996–97 season, only three NBA teams did not field an American-born white; on the opening day of the 2016–17 season, eight teams did not have a white American on their roster, and an additional 10 teams had only one. At the latter point in time, fewer than 10% of NBA players were American-born whites (43 out of a possible 450)."

The paper codes a black vs. non-black variable, not white vs. non-white. Also it includes foreign players, of which there are a substantial number in the league.

LOL Let me understand this: The NBA is 75% black and blacks ARE 13% of the population and someone thinks the NBA is discriminating AGAINST blacks in favor of whites? Is that the story you are sticking to. Did you miss the elephant in the room???

In compensation, not representation. Careful with that myopia charge.

"evidence of consumer discrimination... No employee nor employer discrimination is found."

Economic theory has taught me that we should definitely punish consumers who have their preferred players; it will definitely benefit the NBA.

Apparently reading the 3 sentences Tyler quoted and *understanding* them is a difficult task for some. Here's the crucial few words you might have missed:

"experience a larger racial wage gap."

Yes now I see. ONLY the discrimination for a favored group matters and all other discrimination is to be ignored. So they do a study and lo and behold they find/makeup discrimination that they want and yet ignore the elephant in the room.

The authors were the ones to use the term "white", so the imprecision is theirs.

Also, it violates identitarian dogma to decide who is black or not based on their subjective interpretations of a picture.

I looked at 2018 for the researchers' stat of Value Over Replacement Player (VORP). The top guy was LeBron followed by James Harden. There was one white in the top ten, a big Serb named Jocik.

I'm not that familiar with current NBA players, but I sure didn't notice many white Americans. Maybe the next highest ranked non-black player was #21 Stephen Adams, who is some kind of Polynesian/white blend. There is a white Australian Joe Ingles at #25.

I didn't recognize the names of a single white American until #83 Kevin Love, but I'm sure I'm overlooking some. I think ...

But in general, it sure seems like white American dads are telling their tall, athletic sons to stay away from basketball. Baseball teams carry about 15 or 20% more pitchers than they used to, so maybe tall white guys are all trying to throw 100 mph these days? Similarly, the percentage of white quarterbacks in the NFL remains quite high (although not in college football). But it sure looks like American whites have given up on the NBA.

I can’t imagine many kids, white or not, who are >95th (let alone 99th) percentile height don’t play or at least attempt basketball to see if they’re any good, but then again I am a long ways from having to think strategically about my kid’s athletic career (for several reasons, the most significant being that I don’t have a kid)

Most of today's tall baseball players played some basketball, but nowadays most big jocks commit fairly early to a single sport, often with a lot of family involvement in choosing which sport they will specialize in. I think Bryce Harper is an example of this, with Giancarlo Stanton being more of a throwback who played three sports in high school and didn't make up his mind between baseball and football until about the time he graduated from high school.

A large fraction of top athletes these days have fathers who paid for a lot of tutoring and travel teams.

I have not read the paper so perhaps the issue is addressed but the NBA has a maximum salary (which increases with years of service) which is calculated as a fixed percentage of the "salary cap" for teams which, in turn, is calculated as a fixed percentage of "basketball related income" obtained by the teams.

This arrangement is negotiated between the NBA and the player's Union. As a result of the maximum salary provision, the best players are always grossly "underpaid" when their statistics are compared to other members of the union. If the best players are African-American (they are), it will appear that African-Americans are under-paid when, in fact, it is really the lesser players who are over-paid (receive a larger share of "basketball related income").

As to why this is (why the players agreed to this arrangement, not why African-Americans are the best players), one obvious answer is that the lesser players are more numerous and therefore have control over the player's union which exceeds their statistical production as players. More likely, in my opinion, is that the top players are so very, very, very well paid that they place higher marginal value of being well thought of by their peers.

I have now read the abstract. I see nothing in the abstract that indicates the authors have excluded maximum salary players and minimum salary players from their analysis. If you don't exclude max players and minimum players, you are not measuring what the paper purports to measure. You are measuring the effect of union-negotiated rules, not "consumer discrimination" in any sense.

Right. LeBron, for example, was extremely underpaid on average during the 2011-2017 time period used in the study. But he made it back it in endorsements that come with winning, IIRC, three rings, which were made possible in part by his not maxing out his salary so his team can afford a better supporting cast for him.

And, OBVIOUSLY, Hayward was not "paid" based on his production after he signed his Celtics contract. He was paid based on his production in Utah prior to becoming a free agent. Based on what he did in Utah, Hayward was definitely a max player when he signed with Boston.

Obviously, American NBA fans and executives are ethnically biased in favor of Serbs and Croatians whose surnames end in "-ic".

I looked at some publication's list of the top 100 NBA players, and 6 of the 100 had surnames ending in "-ic". That's a pretty massive fraction of all the white starters in the league.

Okay, I read the paper.

Unfortunately, it dodges most of the better issues raised in the comments, such as the impact of the salary cap, and whether it's plausible that non-North American white players really benefit from white American fans rooting for some Lithuanian whose name they can't spell over Stephen Curry.

I think these kind of papers should perform a reality check by simply listing the 100 most underpaid and overpaid players according to their model. A lot of misconceptions quickly pop out when you do that kind of reality check, but these folks don't.

Here's a candidate for most overpaid white American: Gordon Hayward, who earned $29 million last season and played only 1 game. He's white guy from Indiana, the home of white guy basketball (e.g., Larry Bird), and he signed with Boston, which probably has the most racist white fans.

But I suspect the fact that Hayward made 7/8ths as much as LeBron last season had more to do with the salary cap and LeBron sacrificing his own salary for the team than with white racism.

Hayward was a matter of timing — the Celtics had tons of money and he was the best player available, and no truly excellent free agent (Durant, LeBron) would ever be interested in Boston. Because humans understand max salaries and timing, I never heard any commentator suggest he was overpaid, and there are a lot of hyperwoke NBA commentators. But I’m sure this paper deems him overpaid.

All of the top free agents (Hayward and Love as well as Durant and James) run up against the maximum salary barrier. That group is going to systematically under-paid compared to their on-court production because the NBA collective bargaining agreement makes it so. This has nothing whatsoever to do with consumers or employers; it is a decision made by the players themselves and, especially, the star players themselves.

Did it ever occur to these poseurs in the economics profession that no one admires or fancies any other person for reasons predominantly subject to discursive argument? Or that partisanship exists on both sides of the color bar, it's just that the people on one side are 6x as numerous as the people on the other? Or that there may be systemic differences in the personal qualities of the two subpopulations of players that fans know about? Or that the values of academics are not universal, and shouldn't be?

I'm beginning to think that the simplest way to reduce the quantum of humbug in public life is to pull a Suharto on the arts and sciences faculty right after you pull one on the media.

What a bizarre and unhinged reaction.

What, criticism of faculty is now 'unhinged'? You trying to make my case?

You're a sad old man.

What? I stick a hatpin in a pair of faculty suck-ups and that's 'sad'? Why?

Dude could you write in english please, this is a blog comment section not a GRE essay question. Meaning clarity is a good thing here.

“I’m not racist, I just happen to not like black people!”

Seems about right for the MR comments.

I guess that's why no one said it?

And many readers of this blog deny that race is the motivation for many white voters. But just the same, I am surprised by the results of this study. About 75% of players in the NBA are black. I tried to find the percentage of blacks/whites who attend NBA games but no results came up from my Google Search. I'm not surprised. NBA games are expensive, so most of the fans in the seats are white. Black fans are on the couch watching the games on tv. Does it matter? Maybe, maybe not. Basketball and race has a long and contentious history. Can you say: Boston Celtics. Longtime fans of the NBA know what I mean. I have a home in the South, and I know that race is a major component in the views of the prevailing white culture. One of the oddities is that the greatest running back in the history of the NFL grew up in the community, but one would never know it. Of course, this is a community that still identifies areas by the slave plantations that once operated in the place.

And many readers of this blog deny that race is the motivation for many white voters.

And that induces them to do just what that they wouldn't otherwise do?

That aside, the voting patterns among the white electorate are more variegated than they are among the black, Mestizo, or Oriental electorates, so it's kind of a mystery why pondering the 'racial' motivation of whites should be anyone's priority. Except that partisan Democrats in the legal profession are worse poseurs than economists.

"The" or "a"? I don't think the only argument is justified anymore than simply stating it is never a factor.

Interestingly, The Bradley Affect https://en.wikipedia.org/wiki/Bradley_effect - says that in the USA whites lie about who they vote for, in favour of non-white candidates, a revelation (proven accurate) that forced a campaign manager to resign.

You are going have to chose - either you live in Florida, or the NFL's greatest running back was from where you live. You can't have both.

That can't be right... Jim Brown was born in Georgia and grew up in Long Island. What's Florida got to do with it?

"While any box score based metric is not perfect as they can not account for the importance of basketball IQ, fundamental skills, or how effective of a team defender a player may be, VORP is an appropriate measure to be used."

The study uses only box-score-based metrics, not on-off metrics that can actually provide unbiased estimates of player value. BPM (and VORP, derived from it) is an estimator that is intended for quick-and-dirty use where on-off data is unavailable. It would have been appropriate for this study to use a metric such as multiyear RPM. The metric used is simply not powerful or accurate enough to draw conclusions such as this.

Specifically, white players have a higher BBIQ on average. This is not a result of the population distribution of BBIQ, but a simple result of selection pressures: since white players are less athletic, only the high-BBIQ ones survive. Therefore -- unless you assert that white players and black players have identical distributions of athleticism, which lol -- a purely box score stat that doesn't use team impact must undervalue white players on average.

I mean, these are billion-dollar orgs with analytics departments and boatloads of data. It would be really surprising if they were systematically making an error of this magnitude in a league that's already majority-black.

This seems highly plausible, but couldn't one make the case that having a solid white guy or two in the starting lineup is valuable from a marketing standpoint, and thus teams bid up their salaries beyond their actual on court values?

But then again...J R Smith famously blowing it for the Cavs by not knowing the frickin score of a finals game a few months ago is a solid point in favor of the "numbers aren't the whole story" story.

I guess, but anecdotally I just haven't observed this happening (either white players getting bid up for that reason or them taking any sort of prominent part of the marketing). If anything, the NBA markets itself to a young, urban, socially liberal base.
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There's a genre of economics paper that engages with sports (in this case, NBA player evaluation) in order to demonstrate some economics point (in this case, racial discrimination). However, in most sports, there's so many sharp people who have already analyzed the same data that, unless you have proprietary data or are genuinely engaging with the cutting edge of analytics, the journal-friendly treatment of the sports aspect is rarely sophisticated enough to be capable of answering the economics question one way or another.

Thanks. I'd be interested to find out if the authors could find similar (alleged) discrimination patterns in baseball, which has an older, whiter fanbase and is even more numbers driven, so presumably the effect would be more pronounced and easier to spot

+1

I think BPM is pretty good but it would be nice to know if the results were robust to the use of adjusted plus/minus metrics. Also to different classifications of racial edge cases -- I'm not sure how you should classify light-skinned mixed-race players like Blake Griffin.

Steve wrote, "I mean, these are billion-dollar orgs with analytics departments and boatloads of data. It would be really surprising if they were systematically making an error of this magnitude ..."

Read the first chapter in "The Undoing Project ...".

Moreover, we investigate different sources of discrimination in this labor market.

Is this actually a "labor market"? Are professional basketball players "laborers"? Maybe they're laborers just as NASCAR drivers are laborers, or golf pros or stand-up comedians. Is there a wage gap in the college faculty scene? Do black college professors make as much whites? By the way, what's the wage gap in the NBA between blacks and native Americans?

I guess the problem is that black players are represented by bad agents.

Racism is often misunderstood. It is not merely an argument pointing out the facts there are races, or skin colors, or ethnicities. This gets confusing: Look at Lauretta Charlton, an African-American and head of Race Related at NYT.
She says "'Birds of a feather flock together.' This was an aphorism that was repeated to me as a child. The lesson was clear: Black people should stay with black people. White people should stay with white people. For me, that’s a classic, seemingly innocuous example of a racist belief."

Indeed, that is not racist. Nor does it giver proper attribution to the quote. A blue jay and a cardinal are birds; they hang out sometimes, but not usually, because birds of a feather flock together.

But think about it: if you mix a greyhound with a bulldog, then the resulting mixed-breed will be the fastest dog AND the strongest dog. This is why genetic balkanization is bad and all humans should be brown.

"I guess the problem is that black players are represented by bad agents."

That's not impossible. I read a book about the teenage years of basketball player Sebastian Telfair from Bed-Stuy, and there were all sorts of relatives and "friends of the family" trying to become his agent. I think he ended up getting more money than he was worth from the NBA, but black players are less likely to have financially sophisticated close relatives.

Yes, it used to be that most teams suspiciously had at least one white guy who got significant playing time.
I look at some of the Europeans in the league and I think, is the NBA try build interest in Europe because some of them aren't very good.

@Floccina - I think you hit upon a flaw in the paper: the white players are 'overcompensated' not because of their race per se, but because fans who are white (most of the NBA viewers) can relate to them, and thus the white players build audience interest.

So it's not so much discrimination as catering to your customer base. Recall a few decades ago (when I last followed the NBA), where the New York Knicks had an all black team, and were called in jest the New York N-word. A token white would have helped build more interest (and bring in more dollars) with their fan base.

Bonus trivia: reading "Jewball" a parody involving a New Jersey Jewish basketball league. I wonder if Tyler {{{Cowen}}} has read it? ;-) TC is not Jewish btw, the above is a parody of surnames.

Yeah, I can recall the Lakers having a suspiciously bad white starter 40 years ago:

https://www.basketball-reference.com/players/f/forddo01.html

But that was a long time ago.

Even before then, the 69-13 1972 Lakers only had two whites in top 7 players, and Jerry West and Gail Goodrich each averaged 26 ppg. Those Lakers had a charismatic personality sitting on the bench in Pat Riley, but he was way down in the rotation.

The most charismatic thing is winning.

This. Like, are they trying to institute some sort of affirmative action or something lol? You can tell that a certain race is not qualified and shouldn't have been hired.

The American dream has become sour. As the time goes by, Americans get more aware of the essentially fraudulent nature of their system and of its unescapable internal contradictions. America has become a bitter divided nation.

No discussion of the glaring gender discrimination in the NBA?

Stop assuming people's gender, you hate-filled psychopath.

"As a player becomes more visible to the fans, he is subject to a
higher racial wage gap, while bench players are found to not be affected by any discrimination."

Could they just be showing that the cap on player salaries leaves the best players in the NBA underpaid based on there relative skill? Reminds me of a story about Lebron being underpaid.
https://www.npr.org/templates/transcript/transcript.php?storyId=628132840
The salary cap could be a discriminatory tool, but that seems like a different paper.

+1, not sure why you'd leave your LeBrons in this data set. Classic researcher degree of freedom.

Excellent point. Michael Jordan was paid $33 million in 1998, but LeBron was making only about half of that on average per year during the time period of this study.

Besides the salary cap, the very best NBA players (who are almost all black) have often not been maxing out their salaries in recent years as they connive to build superteams to win championships. NBA players can make a huge amount in endorsements, so strategies like LeBron easing up on his salary demand to help bring an NBA title to his hometown of Cleveland will probably pay off for him in the long run due to increased good will from fans.

Another factor is that a lot of the white players are foreigners who are more likely than an African American to sign with a European team, so there's more competition for, say, the Gasol brothers, who could plausibly threaten to play in their native Spain if they weren't highly compensate in the NBA.

(Didn't Kobe Bryant, who grew up partly in Italy, once threaten to play in Spain for $50 million?)

That's probably not a major influence compared to the salary cap: I think the highest salary paid in the Euro League is $4 million to a Russian guy, so there's not too much salary competition with the NBA.

>alas I have long suspected this

Really? You have knowingly decided to support a sports league that you have "long suspected" was ruled by hate and bigotry and oppression? What the hell is wrong with you?

And now that you have proof, how will you change your behavior?

Good lord, is this sarcastic? A slight bias in pay for a few millionaires is now hate, bigotry, and oppression?

Did they account for the salary cap? Don’t most analyses suggest superstars are “underpaid” relative to their value primarily because of the cap?

This is big. They also need to account for the salary cap changing. I can name two overpaid white players recently who were overpaid simply because the salary cap ballooned as they became free agents - Timofey Mozgov and Chandler Parsons. Both are awful, and it's possible Cuban paid Chandler just to play pretty boy for Dallas Teenagers and recruit Deandre Jordan.

Wouldn’t we expect the cap changing effect to apply approximately equally to both whites and blacks?

Yes, but there aren't very many observation. I believe quantile regression helps with certain issues relative to OLS, but if by chance there are a few more Kevin Love, Tim Mozgov, Chandler Parsons type players during the large cap change years, then the analysis may be biased. Worth checking but a priori not a likely thing to have happened.

"Consumer discrimination" = whites less interested in watching for and so paying to watch games with athletes who don't look, talk or express themselves the same way?

Of course, blacks would be the same way, but there are fewer and they have less money.

I don't know how to feel too sad about this - ultimately sports are a performance, and black athletes have not been slow to embrace that to market themselves and make money (certainly no less than others). So why expect things to be that radically different than for actors or pop idols?

Probably you'd feel sadder if you were a sports fan who saw these as real competitions of human excellence, not a kind of bizarre display of pageantry with arbitrary rules favouring a bunch of people with weird edge case genetics.

Has there been a massively popular white NBA player since Larry Bird in the 1980s?

Most of the better white players since Bird haven't been American, so that cuts down on their popularity in the U.S.

And North American white stars tend to come from remote parts such as the Pacific Northwest. My guess is that whites do better if they don't have to play against a lot of blacks while they are maturing. So the best white North American players tend to be from remote places like John Stockton's Spokane or Steve Nash's Victoria Island or Kelly Olnyk's Kamloops.

I am not sure I follow, but carry on. This sounds important.

Lang Lang is the highest paid classical pianist. Lang Lang is no where near the best classical pianist today. Music is entertainment, the NBA is entertainment, I don't see the issue.

Curious how they categorized Steph and clay, both are mostly white.

I suspect that an important factor here is the different type of players blacks and whites tend to be. Basically, whites are usually big men or 3 pt specialists, while blacks are more spread over all player types, but dominate the highest scoring types, like athletic wings.

My guess is that specialists command a salary/VORP premium due to scarcity and necessity (i.e. all teams need specialists) and that whites are much more likely to be specialists.

This is interesting. It's true that it's hard to find a stat-sheet stuffer (strong fantasy player) who is not white. In recent years, I can only think about Ginobili, Gasol's (both), Steve Nash, Dirk, spread out over the last decade or so.

Aren't they still higher up than the negroes themselves?

Don't you almost have to exclude super max contract allstars because there is so little white parity at that skill level? NBA is a lot about how many max contracts you can carry and I would imagine that's highly distortionary on parity analysis.

This. Would you still be claiming consumer racism if you included endorsements?

They have not controlled for salary caps when a) the NBA is superstar driven (who are predominantly be black) and b) superstar compensation is heavily tilted towards endorsements, basically invalidates the conclusion of the paper.

In short, in the post-Jordan era this paper is looking at the wrong data.

I would be curious about asian players since the Rockets paid a premium for Yao Ming because they counted on increased sales to Chinese markets. I bet if a preternaturally talented golden retriever from Wahington State became eligible it would be paid a premium as well.

Guys, guys, Straussian reading -- within a field affirmative action drags down average performance, under-compensates the most talented, and overcompensates those who are just there to fill racial quotas.

Solve for the equilibrium.

The problem with using VORP and WS this way is that GMs don't pay you on your actual VORP/WS, as though it were a pile of widgets you made last year and they're buying them. They pay you for for an expected future flow of VORP/WS, which is an entirely different proposition. Also, a significant share of NBA income, particularly at high skill levels, is via endorsements.

Wouldn’t this be easy to test from a different angle...team wins per $ of salary should be higher for teams with more black players (since they are better values).

For some reason I doubt that’d hold up.

I have been struck by the number of sons of former players who play now. I would think that young Hardaway or Sabonis have a great deal of sophistication about NBA contracts and command a premium.

I have several technical questions regarding the analysis.
1) what is the uncertainty on the effect? Quantile regression is less powerful than OLS, so it's not obvious that the sample size is sufficiently powered.
2) Are the player samples equally distributed along VORP? If not, if not, we may be vulnerable to a Yule-Simpson effect or some other bias. For example, there is an implicit assumption that VORP should be linearly related to compensation. For example, are the authors really showing that the very best players are under compensated, perhaps because of the salary cap?
3) On what basis do the authors infer causality? It seems they just have no other explanations "72.7% of the wage gap found cannot be explained
by observable characteristics and, therefore, is attributed to racial discrimination" but correlations imply neither the the arrow of causality nor can they account for other latent variables. There are techniques for examining these (see for example Judea Pearl) but this is just ignored in the paper.
4) I noticed several percentages in the factors, this might cause problems of spurious correlation, since "wins" is the unit of VORP.

I really would have expected a "limitations" section to discuss the seriously address the threats to validity so that we could see that they understood all the potential arguments.

Averages can be misleading. I'd like to see the graph of observations.

It's surprising to hear this blamed on consumer discrimination given this post:

https://marginalrevolution.com/marginalrevolution/2017/02/usa-nba-fact-day.html

"Roughly speaking, I estimate that a white player would have to score 10 more points per game to have as big a fan base on Facebook as he would have if he were black."

There is a huge race discrimination in the NBA todag still.The owners or the higher up mangemnet will and do view the players as “assets” so they will not have a problem with paying a player of color less then a player none colored.

There is a huge race discrimination in the NBA today still.The owners or the higher up management will and do view the players as “assets” so they will not have a problem with paying a player of color less then a player none colored.They will and do so because they look out for only the benefit if themselves you see it in every sport and when it comes to a player who has a troubled past (who is colored)they will find a way for them to be payed less or simply not pay them at all not have them on their team so they can pay someone else who in their eyes deserves to be payed more which helps leads to the average of colored players being payed less

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