Customer Discrimination in Professional Basketball: Evidence from the Trading-Card Market

Abstract

This paper presents evidence on the existence of customer racial discrimination in professional basketball from recent prices for the trading cards of former players in the National Basketball Association. Data were collected on the 258 active roster players in the NBA during the 1976-77 season, 133 of whom had cards issued that year. Maximum-likelihood estimation of a card-price equation is carried out, accounting both for the nonrandom selection of the players for whom cards exist and for left-censoring of the dependent variable. Overall, the empirical results suggest the absence of customer racial discrimination in the pricing of basketball trading cards. However, there is some evidence that the effect of career length on trading-card prices is lower for whites than for blacks, and that the card-price premium for players who subsequently coached in the NBA is lower for blacks than for whites.

Keywords: Customer discrimination, NBA, trading cards

JEL Classification: J7, J15, C34