Skip to main content
SpringerLink
Log in

Production Efficiency and Discriminatory Hiring Practices in the National Hockey League: A Stochastic Frontier Approach

  • Published:
Review of Industrial Organization Aims and scope Submit manuscript

Abstract

This paper studies the production process in the National Hockey League (NHL) and attempts to identify the sources of production inefficiency, including potential inefficiencies associated with preferences for, or against French-Canadians. Employing the method of stochastic frontier estimation, it is shown that production inefficiencies are prevalent in the NHL and can, in part, be traced to differences in coaching ability, team ownership, local sports competition, and management experience. In addition, it is found that teams with unusually high (or low) numbers of French-Canadian players tended to be less efficient, implying that discriminating hiring practices are costly.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • D. J. Aigner C. A. K. Lovell P. Schmidt (1977) ArticleTitle‘Formulation and Estimation of Stochastic Frontier Production Function Models’ Journal of Econometrics 6 21–37 Occurrence Handle10.1016/0304-4076(77)90052-5

    Article  Google Scholar 

  • George Akerlof (1982) ArticleTitle‘Labor Contracts as Partial Gift Exchange’ Quarterly Journal of Economcs 97 543–569

    Google Scholar 

  • Armen Alchian Demsetz Harold (1972) ArticleTitle‘Production, Information Costs, and Economic Organization’ American Economic Review 67 777–795

    Google Scholar 

  • G. E. Battese G. S. Corra (1977) ArticleTitle‘Estimation of a Production Frontier Model: With Application to the Pastoral Zone of Eastern Australia’ Australian Journal of Agricultural Economics 21 169–179

    Google Scholar 

  • G. E. Battese T. Coelli (1988) ArticleTitle‘Prediction of Firm-Level Technical Efficiencies with a Generalised Frontier Production Function and Panel Data’ Journal of Econometrics 38 387–399 Occurrence Handle10.1016/0304-4076(88)90053-X Occurrence HandleMR964638

    Article  MathSciNet  Google Scholar 

  • Battese, G. E., and T. Coelli (1993) ‘A Stochastic Frontier Production Function Incorporating a Model for Technical Inefficiency Effects’, Working Papers in Econometrics and Applied Statistics, 69, University of New England.

  • G. E. Battese T. Coelli (1995) ArticleTitle‘A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data’ Empirical Economics 20 325–332 Occurrence Handle10.1007/BF01205442

    Article  Google Scholar 

  • Gary Becker (1957) The Economics of Discrimination University of Chicago Press Chicago, IL

    Google Scholar 

  • Fiona Carmichael Thomas Dennis Ward Robert (2001) ArticleTitle‘Production and Efficiency in Association Football’ Journal of Sports Economics 3 228–243

    Google Scholar 

  • Caves, Richard E. in association with Sheryl D. Bailey et al. (1992) Industrial Efficiency in Six Nations. The MIT Press, Cambridge MA

  • L. R. Christensen D. W. Jorgensen L. J. Lau (1973) ArticleTitle‘Transcendental Logarithmic Production Frontiers’ Review of Economics and Statistics 1 28–45

    Google Scholar 

  • Coelli, Tim (1996) ‘A Guide to FRONTIER Version 4.1: A Computer Program for Stochastic Frontier Production and Cost Function Estimation’, CEPA Working Paper 96/07, Department of Econometrics, University of New England, Armidale, Australia.

  • Peter Dawson Dobson Stephen Gerrard Bill (2000) ArticleTitle‘Estimating Coaching Efficiency in Professional Team Sports: Evidence from English Association Football’ Scottish Journal of Political Economy 4 399–421 Occurrence Handle10.1111/1467-9485.00170

    Article  Google Scholar 

  • Dan Diamond (Eds) (2000) Total Hockey: The Official Encyclopedia of the National Hockey League Total Sports Publishing New York

    Google Scholar 

  • David Forrest Simmons Rob (2004) ‘Buying Success: Team Salaries and Performance in North American and European sports leagues’ R. Fort J. Fizel (Eds) International Sports Economics Comparisons Praeger Westport, Connecticut 123–140

    Google Scholar 

  • W.H. Greene (1993) ‘The Econometric Approach to Efficiency Analysis’ H.O. Fried C.A.K. Lovell S.S. Schmidt (Eds) The Measurement of Productive Efficiency Oxford University Press New York 68–119

    Google Scholar 

  • Hofler, Richard A., and James E. Payne (2004) ‘Efficiency in the National Basketball Association: A Stochastic Frontier Approach with Panel Data’, Managerial and Decision Economics, forthcoming.

  • Todd L. Idson Leo H. Kahane (2000) ArticleTitle‘Team Effects on Compensation: An Application to Salary Determination in the National Hockey League’. Economic Inquiry 2 345–357 Occurrence Handle10.1093/ei/38.2.345

    Article  Google Scholar 

  • Todd L. Idson Leo H. Kahane (2004) ArticleTitle‘Teammate Effects on Pay’ Applied Economic Letters 12 731–733 Occurrence Handle10.1080/1350485042000254872

    Article  Google Scholar 

  • J. C. H. Jones Nadeau Serge Walsh William (1999) ArticleTitle‘Ethnicity, Productivity and Salary: Player Compensation and Discrimination in the National Hockey League’ Applied Economics 5 593–608

    Google Scholar 

  • J. C. H. Jones D. Walsh William (1988) ArticleTitle‘Salary determination in the National Hockey League: the Effects of Skills, Franchise Characteristics, and Discrimination’ Industrial and Labour Relations Review 4 592–604

    Google Scholar 

  • Leo H. Kahane (2001) ArticleTitle‘Team and Player Effects on NHL Player Salaries: A Hierarchical Linear Model Approach’ Applied Economics Letters 9 629–632 Occurrence Handle10.1080/13504850010028607

    Article  Google Scholar 

  • L. M. Kahn (1991) ArticleTitle‘Discrimination in Professional Sports: A Survey of the Literature’ Industrial Labor Relations Review 3 395–418

    Google Scholar 

  • Stefan Késenne (2000) ArticleTitle‘Revenue Sharing and Competitive Balance in Professional Team Sports’ Journal of Sports Economics 1 56–65

    Google Scholar 

  • D. A. Kodde F. C. Palm (1986) ArticleTitle‘Wald Criteria for Jointly Testing Equality and Inequality Restrictions’ Econometrica 54 1243–1248

    Google Scholar 

  • S. C. Kumbhakar C. A. Knox Lovell (2000) Stochastic Frontier Analysis Cambridge University Press Cambridge

    Google Scholar 

  • Marc Lavoie (2000) ArticleTitle‘The Location of Pay Discrimination in the National Hockey League’ Journal of Sports Economics 4 401–411

    Google Scholar 

  • Marc Lavoie Grenier Gilles (1992) ‘Discrimination and Salary Determination in the National Hockey League’ G.W. Scully (Eds) Advances in the Economics of Sport JAI Press Greenwich

    Google Scholar 

  • Marc Lavioe Grenier Gilles Coulombe Serge (1987) ArticleTitle‘Discrimination and Performance Differentials in the National Hockey League’ Canadian Public Policy 4 407–422

    Google Scholar 

  • Neil Longley (2000) ArticleTitle‘The Underrepresentation of French Canadians on English Canadian NHL Teams: Evidence from 1943 to 1998’ Journal of Sports Economics 3 236–265

    Google Scholar 

  • Neil Longley (1995) ArticleTitle‘Salary Discrimination in the National Hockey League: The Effects of Team Location’ Canadian Public Policy 4 470–475

    Google Scholar 

  • Robert C. McLean R. Veall Michael (1992) ArticleTitle‘Performance and Salary Differentials in the National Hockey League’ Canadian Public Policy 4 470–475

    Google Scholar 

  • W. Meeusen J. Broeck Particlevan den (1977) ArticleTitle‘Efficiency Estimation from Cobb–Douglas Production Functions with Composed Error’ International Economic Review 18 435–444

    Google Scholar 

  • James Quirk D. Fort Rodney (1992) Pay Dirt: The Business of Professional Team Sports Princeton University Press Princeton

    Google Scholar 

  • David H. Richardson (2000) ArticleTitle‘Pay, Performance and Competitive Balance in the National Hockey League’ Eastern Economic Journal 4 393–417

    Google Scholar 

  • Gerald W. Scully (1974) ArticleTitle‘Pay and Performance in Major League Baseball’ American Economic Review 5 915–930

    Google Scholar 

  • Stefan Szymanski (2000) ArticleTitle‘A Market Test for Discrimination in the English Professional Soccer Leagues’ Journal of Political Economy 3 590–603 Occurrence Handle10.1086/262130

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Economics, Mount Holyoke College, and California State University, East Bay 50, College Street, South Hadley, MA, 01075, U.S.A

    Leo H. Kahane

Authors
  1. Leo H. Kahane
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Leo H. Kahane.

Additional information

Jel Classifications: D21, J71, L83

Rights and permissions

Reprints and permissions

About this article

Cite this article

Kahane, L.H. Production Efficiency and Discriminatory Hiring Practices in the National Hockey League: A Stochastic Frontier Approach. Rev Ind Organ 27, 47–71 (2005). https://doi.org/10.1007/s11151-005-4400-4

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11151-005-4400-4

Keywords

Search

Navigation