Date of Submission
Open Access Senior Thesis
Bachelor of Arts
© 2017 Jonah F Breslow
In this paper, I examine trends in salary inequality from the 1985-86 NBA season to the 2015-16 NBA season. Income and wealth inequality have been extremely important issues recently, which motivated me to analyze inequality in the NBA. I investigated if salary inequality trends in the NBA can be explained by either returns to skill or widening skill distributions. I used Pareto exponents to measure inequality levels and tested to see if the levels changed over the sample. Then, I estimated league-wide returns to skill. I found that returns to skill have not significantly changed, but variance in skill has increased. This result explained some of the variation in salary distributions. This could potentially influence future Collective Bargaining Agreements insofar as it provides an explanation for widening NBA salary distributions as opposed to a judgment whether greater levels of inequality is either good or bad for the NBA.
Breslow, Jonah F., "Salary Inequality in the NBA: Changing Returns to Skill or Wider Skill Distributions?" (2017). CMC Senior Theses. 1645.