Are Professional Basketball Fans Racists?

Abstract

This paper explores Kahn and Scherer's results in search of a better understanding of this complex issue. We accept their result of a 20 percent salary differential. In an expanded sample of NBA season, however, we find no evidence of customer discrimination by NBA fans. To the contrary, if anything, there is a preference for more black players and more black playing time in our results. We employ the same empirical model as Kahn and Scherer, but add two more seasons' worth of attendance data. We also model playing time for NBA players as a function of performance and race. Definitively, black players are allotted more minutes than comparable white players.In light of these results, we are left with the following: a) a large salary differential between black and white players, b) little basis for a claim of customer discrimination, and c) more playing time for black players, all else equal. This pattern of results, in our view, is not driven by racial discrimination but by price discrimination. NBA owners and executives are engaging in price discrimination across classes of players who have different elasticities of supply. For whatever reason (including past racial discrimination), black players have a higher elasticity of supply with respect to providing professional basketball services than do comparable white players. The salary differential identified by Kahn and Scherer is most likely a result of this condition.

JEL Classification: J31, J70