Do NBA Players Perform Better in Low-Tax States?

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In summary, Conklin and Daniel's study found that NBA players from teams in low-tax states have a higher free-throw percentage when playing in high-tax states compared to when they play in zero-tax states. The statistical significance of this finding was confirmed with a p-value of 0.028. The Ig Nobel committee has received over 1.2 million articles and allows self-nominated papers, with about 10-15% of winners being self-nominees. The author of this conversation also received recognition for their nomination and chose a back issue of the Ig Nobel magazine on rotation.
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This summary copied from https://www.counterpunch.org/2023/07/25/289783/

In Taxes and Athletic Performance: Why NBA Players Perform Better in Low-Tax States, Conklin and Daniel introduce what they see as compelling statistical evidence that higher state tax rates cause NBA players to miss free throws that NBA players in low-tax states make.

Conklin and Daniel chose six teams from relatively low-tax states — the Cleveland Cavaliers, Detroit Pistons, Charlotte Hornets, Indiana Pacers, Denver Nuggets, and Utah Jazz — and analyzed their free-throw percentages in away games against six teams in zero-income-tax states (Texas, Tennessee, and Florida) and nine teams in high-income-tax jurisdictions (New York, Oregon, Minnesota, California, and the District of Columbia).

In the resulting 465-game dataset, players from the six teams based in low-income-tax states made an average 77.04 percent on the free throws they shot in high-tax state arenas. These same players, when playing away games in a zero-tax state, averaged 78.9-percent makes.

Find that significant? Conklin and Daniel certainly did. They checked “for statistical significance” at the 95-percent level, they explain, with a “simple, two-sample regression analysis assuming equal variances” and had their sample’s statistical significance “confirmed with a p-value of 0.028, well under the required 0.05.”

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SSRN, formerly known as Social Science Research Network, has published well over 1.2 million articles.

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I know it's a nominee for the Ig Nobel because I nominated it. "By tradition, for balance, on the final day of deliberations, a random passerby is invited to help make the decision." I found out that while nominees have the option of quietly refusing the prize, this is seldom exercised. Indeed about 10-15% of winners are self-nominees. Many welcome the publicity. NHK had a special in which they interviewed Japanese Ig Nobel winners.

https://improbable.com/ig/about-the-ig-nobel-prizes/ig-nobel-nominations/
 
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What an excellent paper!

It would be interesting to look at pre-2015 Celtics data, as then Massachusetts was a so-called double tax state.
 
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The Ig Noble people wrote back, "I can see why anyone, or at least the authors, would be impressed." They gave me my choice of a free back issue of their magazine. I chose the one on rotation. What kooky things could anyone do with rotation? Guess I'm going to find out.
 

FAQ: Do NBA Players Perform Better in Low-Tax States?

Do NBA players statistically perform better in low-tax states?

There is no definitive evidence that NBA players perform better in low-tax states. Performance is influenced by a multitude of factors, including team dynamics, coaching, personal health, and motivation, rather than just tax considerations.

Do lower taxes attract better talent to NBA teams in those states?

While lower taxes might be a factor for some players when choosing a team, it is not the sole determinant. Players consider various aspects such as team success, market size, lifestyle, and personal preferences. However, lower taxes can be an attractive financial incentive.

How do taxes affect an NBA player's net income?

State income taxes can significantly impact an NBA player's net income, especially for high earners. Players in states with no state income tax, like Texas or Florida, can retain a larger portion of their earnings compared to those in high-tax states like California or New York.

Are there any studies that link state taxes to NBA team success?

There is limited research directly linking state taxes to NBA team success. Team success is more closely related to factors such as management, player talent, coaching, and organizational culture. Taxes are just one of many variables that could indirectly influence team performance.

Do NBA players negotiate contracts differently based on state taxes?

Yes, some players and their agents may consider state taxes when negotiating contracts. They might seek higher salaries or additional incentives to offset the tax burden in high-tax states. However, this is just one element of the negotiation process.

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