Observably, free agents in the National Basketball Association often make misguided decisions during the free agency period. These decisions may have a direct effect on a player’s performance and salary, affecting their overall utility. Research exists confirming that moving through free agency leads to an effect on player performance, but no study has explored the effect of changing teams through free agency on a player’s salary. As a significant number of players enter this market every year, research on this area is crucially important. The null hypothesis for performance is: H0: moving to a different team through free agency leads to a decrease in player performance. The hypothesis for a player’s salary is that moving to a different team through free agency will lead to an increase in the magnitude on a player’s contract. Ordinary Least Squares regressions were used to test these hypotheses for two datasets. The main findings of this study are that players who re-sign with the team they played for in the previous year (in free agency) will earn an estimated $494,723.60 more on average over the next two years of their contract while performing slightly worse (an average decrease in performance of 4.36%). With an awareness of the potential drop in performance, players who choose in free agency to re-sign could increase their utility by earning a larger salary.
","abstract_html":"<p>Observably, free agents in the National Basketball Association often make misguided decisions during the free agency period. These decisions may have a direct effect on a player’s performance and salary, affecting their overall utility. Research exists confirming that moving through free agency leads to an effect on player performance, but no study has explored the effect of changing teams through free agency on a player’s salary. As a significant number of players enter this market every year, research on this area is crucially important. The null hypothesis for performance is: H0: moving to a different team through free agency leads to a decrease in player performance. The hypothesis for a player’s salary is that moving to a different team through free agency will lead to an increase in the magnitude on a player’s contract. Ordinary Least Squares regressions were used to test these hypotheses for two datasets. The main findings of this study are that players who re-sign with the team they played for in the previous year (in free agency) will earn an estimated $494,723.60 more on average over the next two years of their contract while performing slightly worse (an average decrease in performance of 4.36%). With an awareness of the potential drop in performance, players who choose in free agency to re-sign could increase their utility by earning a larger salary.</p>","abstract_has_math":false,"creators":["Erikson, Austin"],"institution":null,"degree_name":"Master of Science (MS)","degree_level":"Thesis - Open Access","degree_discipline":"Economics","degree_department":null,"school":null,"contributors":["George Langelett"],"advisors":[],"committee_chairs":[],"committee_members":[],"year":2016,"date_issued":"2016-01-01T08:00:00Z","date_published":"2016-01-01T08:00:00Z","updated_at":"2026-07-24T04:28:30Z","subjects":["basketball","free agency","NBA","sports","unrestricted","utility","Economics","Economic Theory","Sports Studies"],"languages":["en"],"rights":[],"rights_urls":["http://rightsstatements.org/vocab/InC/1.0/"],"identifier_entries":[]},"links":{"outbound_url":"https://openprairie.sdstate.edu/etd/1035","outbound_label":"Repository record","outbound_source":"dc:identifier"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor","label":"Contributor","values":["George Langelett"]},{"key":"dc:creator","label":"Author","values":["Erikson, Austin"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date.available","label":"Dc Date Available","values":["2016-08-16T07:00:00Z"]},{"key":"thesis:degree_discipline","label":"Discipline","values":["Economics"]},{"key":"thesis:degree_level","label":"Degree Level","values":["Thesis - Open Access"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Master of Science (MS)"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["basketball","free agency","NBA","sports","unrestricted","utility","Economics","Economic Theory","Sports Studies"]}]},{"id":"language_rights","label":"Language and Rights","entries":[{"key":"dc:language","label":"Dc Language","values":["en"]},{"key":"dc:rights","label":"Dc Rights","values":["http://rightsstatements.org/vocab/InC/1.0/"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier","label":"Identifier","values":["https://openprairie.sdstate.edu/etd/1035"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description.abstract","label":"Abstract","values":["Observably, free agents in the National Basketball Association often make misguided decisions during the free agency period. These decisions may have a direct effect on a player’s performance and salary, affecting their overall utility. Research exists confirming that moving through free agency leads to an effect on player performance, but no study has explored the effect of changing teams through free agency on a player’s salary. As a significant number of players enter this market every year, research on this area is crucially important. The null hypothesis for performance is: H0: moving to a different team through free agency leads to a decrease in player performance. The hypothesis for a player’s salary is that moving to a different team through free agency will lead to an increase in the magnitude on a player’s contract. Ordinary Least Squares regressions were used to test these hypotheses for two datasets. The main findings of this study are that players who re-sign with the team they played for in the previous year (in free agency) will earn an estimated $494,723.60 more on average over the next two years of their contract while performing slightly worse (an average decrease in performance of 4.36%). With an awareness of the potential drop in performance, players who choose in free agency to re-sign could increase their utility by earning a larger salary.
"]},{"key":"dc:title","label":"Title","values":["The Effect of NBA Free Agency on Player Utility"]}]}],"canonical_facts":{"dc:contributor":["George Langelett"],"dc:creator":["Erikson, Austin"],"dc:date.available":["2016-08-16T07:00:00Z"],"dc:description.abstract":["Observably, free agents in the National Basketball Association often make misguided decisions during the free agency period. These decisions may have a direct effect on a player’s performance and salary, affecting their overall utility. Research exists confirming that moving through free agency leads to an effect on player performance, but no study has explored the effect of changing teams through free agency on a player’s salary. As a significant number of players enter this market every year, research on this area is crucially important. The null hypothesis for performance is: H0: moving to a different team through free agency leads to a decrease in player performance. The hypothesis for a player’s salary is that moving to a different team through free agency will lead to an increase in the magnitude on a player’s contract. Ordinary Least Squares regressions were used to test these hypotheses for two datasets. The main findings of this study are that players who re-sign with the team they played for in the previous year (in free agency) will earn an estimated $494,723.60 more on average over the next two years of their contract while performing slightly worse (an average decrease in performance of 4.36%). With an awareness of the potential drop in performance, players who choose in free agency to re-sign could increase their utility by earning a larger salary.
"],"dc:identifier":["https://openprairie.sdstate.edu/etd/1035"],"dc:language":["en"],"dc:rights":["http://rightsstatements.org/vocab/InC/1.0/"],"dc:subject":["basketball","free agency","NBA","sports","unrestricted","utility","Economics","Economic Theory","Sports Studies"],"dc:title":["The Effect of NBA Free Agency on Player Utility"],"thesis:degree_discipline":["Economics"],"thesis:degree_level":["Thesis - Open Access"],"thesis:degree_name":["Master of Science (MS)"]},"updated_at":"2026-07-24T04:28:30Z"}