The Economics of Sports FIFTH EDITION Chapter 10 Discrimination: Theory, Measurement, and Consequences MICHAEL A LEEDS | PETER VON ALLMEN Introduction • Jackie Robinson became the first black player in MLB’s modern era (NL; hired by manager Branch Rickie) – 1946—Montreal Royals – 1947—Brooklyn Dodgers • Larry Doby became the first black in the AL (hired by Bill Veeck) – 1947—Cleveland Indians • It is remarkable that Robinson and Doby flourished despite the tense atmosphere in which they played Copyright ©2014 Pearson Education, Inc All rights reserved 10-2 Learning Objectives • Understand the Becker model of discrimination • Describe how various forms of discrimination can occur in professional sports • Evaluate gender discrimination in college sports Copyright ©2014 Pearson Education, Inc All rights reserved 10-3 Empirical Studies and Definitions • A major study finds that all players face the same opportunities in MLB, NFL and NBA • Some economic studies find that there are differences in pay in the NBA as well as European soccer • They also find evidence of discrimination in the NFL draft • We need to distinguish between – Prejudice a feeling or emotion – Discrimination an action • Economists separate two issues – Equal access to work (draft order) – Equal pay for equal work (equal salaries to equally talented players in same positions) Copyright ©2014 Pearson Education, Inc All rights reserved 10-4 10.1 Becker’s Theory of Discrimination • Gary Becker (1957) uses neoclassical theory to analyze and evaluate discrimination like any other “good” – Neoclassical theory assumes that people maximize utility subject to constraint – Economists focus much more on the outcome of discrimination than on its origin • Becker considers prejudice a taste – Discrimination is indulging that taste – This indulgence comes at a cost • We can reduce discrimination by raising its cost Copyright ©2014 Pearson Education, Inc All rights reserved 10-5 10.2 Different Forms of Discrimination • This section introduces – Employer Discrimination – Employee Discrimination – Consumer Discrimination • Although each model uses money to measure the intensity of the discrimination, they are all based on utility maximization • As people with a taste for discrimination maximize their utility, their willingness to pay to indulge their tastes has a variety of effects Copyright ©2014 Pearson Education, Inc All rights reserved 10-6 Employer Discrimination • In Becker ’s model, employers have preferences regarding employees with whom they and not want to associate • There have been many studies of discrimination against French-speaking hockey players (Francophones) – Their findings depend in many cases on the players’ positions • To simplify matters, assume that there are only two groups of players – English-speaking (E) and French-speaking (F) • We assume for now that, although the players’ styles may differ, they are equally productive – They have the same MPL Copyright ©2014 Pearson Education, Inc All rights reserved 10-7 Employer Discrimination • If a hockey team owner dislikes Francophones, employing them brings a psychic cost – He feels that he pays them more than others – The perceived wage is • wF = (1+dF)wE – dF = discrimination coefficient (%) • If the employer pays both F and E the same, he feels as if he is paying F more • As a result, the demand for F falls Copyright ©2014 Pearson Education, Inc All rights reserved 10-8 Employer Discrimination • Assume for simplicity that the supply of both players is the same • Panel b in Figure 10.1 indicates that the wages of both kinds of players will be the same • Panel a in Figure 10.1 indicates that with discrimination, the demand for Francophones falls – At any given wage, the employers’ distaste for them reduces their willingness to hire them • As a result, F’s wage falls relative to E’s – WE > WF Copyright ©2014 Pearson Education, Inc All rights reserved 10-9 Figure 10.1 Copyright ©2014 Pearson Education, Inc All rights reserved 10-10 Consumer Discrimination • Consumers have a taste for discrimination if they prefer not to purchase goods or services from members of a specific group – Customers feel a psychic cost • Some fans feel they pay a higher price p(1+dk) when watching black players – p is the price of watching white players • Consumer discrimination can be difficult to isolate • A team feels pressure to discriminate – It fears that fans will go elsewhere – Unprejudiced employers are led to discriminate Copyright ©2014 Pearson Education, Inc All rights reserved 10-30 Consumer Discrimination • Consumer discrimination can affect attendance • Consumers could show their taste for discrimination by supporting teams that have fewer players from the group that they dislike • Consumers could follow teams that are integrated but so with less intensity—going to fewer games, buying fewer jerseys, watching the team less on television Copyright ©2014 Pearson Education, Inc All rights reserved 10-31 Detecting Consumer Discrimination • Studying consumer behavior can be difficult – It is not obvious how to separate taste for the team from the taste for individual players • Several studies focus on memorabilia rather than game attendance – Do fans prefer the cards of white players, all else equal? – Evidence suggests they Copyright ©2014 Pearson Education, Inc All rights reserved 10-32 Measuring Discrimination • In 1988 Kahn & Scherer asked: – Is there racial discrimination in the NBA? – How can there be when the NBA is 80% Black? • Black players earn more than white ones on average • The theory of discrimination says that – Average pay is suggestive but not conclusive – Discrimination means paying equals unequally – Compare black players with otherwise identical whites • Kahn and Scherer found that black players received about 20% less than white players Copyright ©2014 Pearson Education, Inc All rights reserved 10-33 Discrimination by National Origin; UEFA • Civil rights legislation outlaws discrimination on the basis of “race, color, religion, sex, or national origin” • Union of European Football Associations (UEFA) is the governing body for European Football/Soccer – Collectively, UEFA feared loss of national identity on club teams if clubs use too many foreigners – Individual teams tried to hire many foreign players to improve – Until 1991 UEFA allowed each team to have only foreign players – This limitation was struck down by European Union Copyright ©2014 Pearson Education, Inc All rights reserved 10-34 UFEA • Because the EU (Treaty of Rome…) allows free movement of labor, teams had to adjust • + Rule limited each team to three starting players from other countries in 1991 – It, too, was struck down—by the “Bosman Ruling” • Jean-Marc Bosman tried to move from Liege (a team in the Belgian League) to Dunkerque (France); he was blocked and appealed to the European Court of Justice • UEFA’s current regulation requires “eight players from every 25-man squad to have been developed in the fielding club’s national association” Copyright ©2014 Pearson Education, Inc All rights reserved 10-35 Positional Discrimination • Positional (or role) discrimination occurs if players have unequal access to specific positions in team sports • Players are stacked in specific positions • Consider positions in the NFL in 2010 – 83 percent of quarterbacks are white – 84 percent of wide receivers are black – In general, white players are more likely to be on offense than on defense • Table 10.1 reports similar inequalities in MLB Copyright ©2014 Pearson Education, Inc All rights reserved 10-36 Table 10.1 Copyright ©2014 Pearson Education, Inc All rights reserved 10-37 Hockey and Football • Hockey has changed since the fall of the Wall • Role discrimination is a possible form of statistical discrimination – A member of a group is being judged based on the average performance of that group instead of individual talent – Troubling because if could be “justified” and selffulfilling • This could be happening in the NFL – Because there are few black quarterback and their low incidence could be discouraging others from trying Copyright ©2014 Pearson Education, Inc All rights reserved 10-38 Discrimination in Coaching • Minority coaches and managers have become increasingly common – The NFL lags behind MLB and the NBA – See Table 10.2 • Women are represented in all major sports, though they generally have little say in personnel decisions • Division I college coaching resembles professional ranks – Minorities are underrepresented at Division II and III schools – Fewer women are coaching – even in women’s sports • Do minority coaches have to be better? – Manning finds that minority NFL coaches have better records – Kahn finds that minority NBA coaches are no more likely to be fired Copyright ©2014 Pearson Education, Inc All rights reserved 10-39 Gender Equity—A Special Case? • Gender equity is harder to measure • Men & women are seldom in the same venue – Babe Didrikson Zaharias, Annika Sorenstam, and Michelle Wie entered the PGA—they are exceptions – Even the same sport may vary: tennis & figure skating • Mixed competition is rare – Mixed tennis doubles is a contrived event – Horse & auto racing are the only real examples – We not know if there are few women because demand or supply is low Copyright ©2014 Pearson Education, Inc All rights reserved 10-40 Fan Demand for Women’s Sports • Demand for women’s professional team sports, such as soccer or basketball, is much lower than for men’s sports • Women fare much better in individual sports – Tennis is a primary example • Wimbledon TV ratings of women’s tennis is high – Women are paid more in gymnastics and figure skating • Women have recently encountered problems in golf – Number of women’s tournaments has fallen Copyright ©2014 Pearson Education, Inc All rights reserved 10-41 10.3 Title IX & Discrimination in College Sports • Title IX has been credited with the success of US women in soccer and the Olympics • Titles deals with more than sports – It is part of 1972 Education Amendments to the 1964 Civil Rights Act – It mandates equal access & opportunities for women in federally funded education programs Secondary schools and college Copyright â2014 Pearson Education, Inc All rights reserved 10-42 Title IX Compliance • Compliance has a long history – It is overseen by the Office of Civil Rights in the Department of Education • There are three ways to comply – Funding and participation must be proportional to enrollment • 5% gap is allowed – School must show history of expansion of programs – School must accommodate interests of students • Very few programs are truly in compliance • No school has been penalized/sanctioned Copyright ©2014 Pearson Education, Inc All rights reserved 10-43 Title IX Impact • Some results are desirable Title IX – Spurred rapid growth in women’s sports • Most of the growth was in the 1970s and 1980s – Gave women grounds to seek remediation • Some results are undesirable – Many colleges have cut men’s programs rather than expand women’s programs – As rewards to coaching have risen, women coaches have disappeared • Fell from ~80% of coaches in women’s sports to ~44% Copyright ©2014 Pearson Education, Inc All rights reserved 10-44 ... Panel b in Figure 10. 1 indicates that the wages of both kinds of players will be the same • Panel a in Figure 10. 1 indicates that with discrimination, the demand for Francophones falls – At any... hand him the letter, Dixie, and you’re gone! I don’t care if a fellow is yellow or black or if he has stripes like a fuckin’ zebra – I am the manager, and I say he plays …I’ll play an elephant... white players of that era • More white players played in the major leagues than would have been possible otherwise • Figure 10. 2 reflects the result of assuming that there is a large supply of white