DISCRIMINATING BUYERS OF BASEBALL CARDS: DOES RACE AFFECT VALUE?

ABSTRACT Since the early days of racial integration in baseball, the issue of fan prejudice has been in question. Evidence of fan reaction to an individual players' race, however, has been nearly impossible to distinguish through such means as game attendance or ticket revenue. Looking at baseball cards, however, allows us to examine evidence based on individual player characteristics, including 'perceived' race. We create an original data set of 2833 player cards. Our findings show strong evidence of racial discrimination, with white player's cards priced an average of $3.25 more than non white players all else being equal. Our approach to the issue of racial discrimination by sports fans is to make use of the fact that baseball trading cards have moved from the shoebox under the bed to the showpiece of sport collectors. The wide market for these trading cards provides us with a way to look at various players both from the angle of player skill and player race. If collectors are prejudice against non-white players, then cards of players with similar stats but of different races would presumably sell for different amounts. (1) INTRODUCTION AND BACKGROUND What had been a childhood hobby, collecting baseball cards that came with sticks of sugary sweet bubble gum, has become big business. Cards that once were purchased to make special noise effects on bikes tires are now investments in 'sports memorabilia. ' Some cards can now sell for thousands of dollars. For example, a 1910 Honus Wagner card recently sold for $640,500 (auction at Christie's in 1996). Sports cards are seeing a surge of interest from adult collectors in the United States. This growing interest among adults, particularly, is evident from the number of sport card shops. Many retail stores (e.g. K-Mart, WalMart, and Target) reserve considerable space for these cards, and that space is in the front of the store: premium space for retail stores. Other evidence of this growing industry is found in the number of card magazines. There is Beckett, Tuff Stuff, Sports Memorabilia, and Topps Baseball Cards, just to name a few. Most of these magazines' main function is to supply pricing information about sport cards, information that would not have interested the initial target customer of this market back in the middle of the century (pre-adolescent males). Card collecting is no longer just hobby, now it is a business, an investment for the buyer. Resale value of a particular player's card is paramount in the concern of today's buyer. As these cards move from the hands of mere aficionados to investors, card buyers must put concerted thought into determining the resale value of these cards. Clearly, the age, condition, and rarity of the card matters, as well as the player's original popularity. Elements in this mix of player characteristics that determines value would include demonstrated player skill (stats) as well as player race. Issues of racial prejudice are becoming very avant garde in the Economics profession. Furthermore, investigation into the evidence provided by sports on discrimination is hardly new (see Kahn, 1991 for a review, while Jewell, 2002 and others continue this type of work). For example, Rottenberg (1956), a forerunner in sports economics, was among the first to look at the labor market in baseball. Research into the area of discrimination in sports has taken many forms; a myriad of papers have examined various aspects of discrimination from many different sports. Nardinelli and Simon (1990) and, later, Gabriel, Johnson, and Stanton (1995) examined baseball memorabilia (other than trading cards) for evidence of discrimination among collectors. Fort and Gill (2000) examine much of the work done on discrimination revealed in memorabilia markets over the past decades. Other avenues of research have led to the examination of Hall of Fame voting, promotion to major leagues, and contract/salary issues for evidence of discrimination. …