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

C-Tier
Journal: Applied Economics
Year: 2023
Volume: 55
Issue: 24
Pages: 2773-2787

Score contribution per author:

1.005 = (α=2.01 / 1 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

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.

Technical Details

RePEc Handle
repec:taf:applec:v:55:y:2023:i:24:p:2773-2787
Journal Field
General
Author Count
1
Added to Database
2026-01-28