Optimal salary inequality for team performance: evidence from National Football League data

    Research output: Contribution to journalArticlepeer-review

    1 Citation (Scopus)

    Abstract

    Using salary data for players in the National Football League, I examine empirically the relationship between salary inequality and team performance under dynamic panel regressions. Main findings are: 1) the relationship between salary inequality and team performance is robustly hump-shaped, 2) the optimal Gini index to maximize the number of wins in a regular season is approximately 0.71 from estimates with all players’ salary data and ranges between 0.52 and 0.56 with players on rosters. These results imply that neither perfect equality nor perfect inequality in salary distribution is beneficial to team performance.

    Original languageEnglish
    Pages (from-to)2773-2787
    Number of pages15
    JournalApplied Economics
    Volume55
    Issue number24
    DOIs
    Publication statusPublished - 2023

    Bibliographical note

    Funding Information:
    The work was supported by the Korea University Research Grant [K2104681]. I am grateful to two anonymous referees, Chirok Han, Kanghyock Koh, Suyong Song and seminar participants at Korea University for helpful comments and discussion. I also thank Jinwoong Lee and Jinbaek Park for research assistance. The usual disclaimers apply.

    Publisher Copyright:
    © 2022 Informa UK Limited, trading as Taylor & Francis Group.

    Keywords

    • Dynamic panel regression
    • Gini index
    • NFL
    • inequality
    • team performance

    ASJC Scopus subject areas

    • Economics and Econometrics

    Fingerprint

    Dive into the research topics of 'Optimal salary inequality for team performance: evidence from National Football League data'. Together they form a unique fingerprint.

    Cite this