Investigating Player Salaries and Performance in the National Hockey League

Abstract

This thesis examines salary structure types (hierarchical or compressed) as predictors of team performance in the National Hockey League (NHL). Additionally, an analysis of goalie statistics is completed in order to determine what, if any, performance measures relate to salary. Data in this research were collected from the 2005-06 season up to the 2010-11 season. Salary inequality/equality (Gini coefficient) was used in a regression analysis to determine if it was an effective predictor of team performance (n = 178) (winning percentage). The results indicated that a hierarchical salary structure increased team performance, although the amount of variability explained was very small. Another regression analysis was completed to determine if any goalie performance measures (n = 245) were effective predictors of individual salary. A regression analysis was employed and indicated that goalie performance measures predicted 19.8% of variance to salary. The only statistical significant variable was games played.