Superstars in the National Basketball Association: Economic Value and Policy
1 October 1997
By Dr. Gregory Leonard with Dr. Jerry Hausman
This paper by NERA Senior Vice President Dr. Gregory Leonard with MIT Professor of Economics Dr. Jerry Hausman analyzes the extent to which superstar players generate revenue not only for their own teams but for other teams as well, which results in a positive externality that can affect the distribution of player talent. Dr. Leonard and Dr. Hausman examine current NBA league policies, including the salary cap system, and conclude that a flat tax on team payroll would be the most efficient means of redistributing league proceeds in order to improve the profitability of small-market teams.
Copyright 1997, The University of Chicago Press. All rights reserved. Used by permission. Hausman JA, Leonard GK, Superstars in the National Basketball Association: Economic Value and Policy, Journal of Labor Economics 15:4 (1997) pp. 586-624.
