By Joshua Rosen
NBA teams have the opportunity each offseason to sign free agents to alter their rosters. Using only regular season per game statistics, I examine the best method of calculating a player’s appropriate salary value based upon his contribution to a team’s regular season win percentage. I first determine which statistics most accurately predict team regular season win percentage, and then use regression analysis to predict the values of these metrics for individual players. Finally, relying upon predicted statistics, I assign salary values to free agents for their upcoming season on specific teams. My results advise teams to rely heavily on Player Impact Estimate (“PIE”) when predicting their teams’ win percentage, and to seek players whose appropriate salaries would be significantly more than their actual season–long salaries if the free agents were to sign.
Advisor: Kent Kimbrough, Peter Arcidiacon | JEL Codes: C30, Z2, Z22 | Tagged: Free Agents, Salaries, NBA