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¶ … league football teams with higher salaries win more frequently than other teams?
The wages of football players have risen noticeably over thirteen fold for the highest paid player from the season that ended in 1985 to that which ended in 2011. This improvement together with the mutually beneficial relationship between the sport and media has brought about an interesting field that has attracted academic scholars to do research on the impacts between different amounts of salaries and its influence on personal and team performance. (Fullard, 2012)
The matter of remunerations of professional players has always attracted public interest for a long time. There are many non-academic reading materials on the issue of salaries of professional players. Remunerations have shifted for the better from 1950's into the 21st century. Research has been done on different kinds of sports to find out the relationship between wages and performance. The most used model for these studies has been the tournament theory; however opposing outcomes have been noted in other studies on hockey. This particular paper examines wage allocation and its link to personal and team performance amongst National Football League (NFL) clubs. (Fullard, 2012)
Hypothesis
The Teams that give higher remunerations for their players will win more times than the other teams.
Approach of the study
Research has been done on personal and team performance and its link to the athletes' wages; the findings from these studies showed that there were several contradictions. The recurring link amongst the 4 studies is that the information used was gathered from seasons that the national football league did not employ a salary limit/cap. Thus there is a gap that must be filled by determining athlete salaries in terms of the salary limit. This paper will utilize data from the season NFL put in place a salary cap. (Fullard, 2012)
Literature review
In sports the American football is classified as based on progressive interdependence. A research done by Mondello and Maxcy (2009) determined if team performance was bolstered or increased when the team had an enticing pay structure (hierarchical) or just a salary-based pay structure (compressed).
The scholars studied the remuneration structures of the NFL clubs form the year 2000 to 2007. A sum total of two hundred and...
The researchers also employed a 2 factor fixed effects structure, which included random and fixed impacts. The conclusion was that salary distribution had an important positive influence on the team's field performance. On the contrary, Frick et al. (2003) determined that there was no direct relationship between wage inequality and a team's on-field performance in their observation of the National Football league. (Fullard, 2012)
Academic materials both old and recent have stressed the rise in salary inequality in the National Football league since the institution of the hard salary limit in the year 1994. The literature also elaborates on the link between salary distribution and the team performance in order to comprehend the dynamics of an optimal salary distribution structure (Winsberg, 2015)
Methodology
Utilizing statistics for all the 32 National Football League clubs in the 2010 through 2014 seasons available at the NFL Players' Association (NFLPA.org), USAToday.com, Over the Cap (overthecap.com), and ianwhetstone.com. I possess the entire salary cap information for all the clubs and all the seasons, each athlete that was paid a salary or received a bonus is included. For every individual athlete I have the statistics including the position on the field, wages, contract signing amount, and all bonuses, how these bonuses were paid back each season, which kinds of bonuses these were, the "limit value" of each athlete. The salaries are normalized using the 2014 dollars to mitigate the effects of inflation, additionally the amounts have been arranged in millions of dollars to design more comprehendible variables. Just from observation of the statistics, one can easily identify that there are huge disparities amongst clubs and the amounts they spend on each group of athletes. (Haugen, 2004)
To determine wage inequality and the disparity in the data Gini coefficients are utilized. This paper employs Gini coefficients to contrast clubs and the positional remuneration disparities against the NFL mean. A coefficient of zero means perfect competition while that of one means maximum inequality between the statistics. Therefore a low Gini score represents an equal pay structure while a high Gini score signifies a more superstar pay structure (Winsberg, 2015)
This research…
References
Borghesi, R. (2008). Allocation of scarce resources: Insight from the NFL salary cap. Journal of Economics and Business 60.6: 536-550.
Frick, B., Prinz, J., & Winkelmann, K. (2003). Pay inequalities and team performance: Empirical evidence from the North American major leagues. International Journal of Manpower, 24(4), 472-488.
Fullard, J. (2012). Investigating Player Salaries and Performance in the National Hockey League. Masters Theses
Haugen, J. (2004).Team Success and Personnel Allocation under the National Football League Salary Cap. The Park Place Economist, Vol. XIV, 56-62
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