Racial preferences in sports NFTs? Empirical evidence from NBA Top Shots

Purpose The purpose of this paper is to analyse a large data set of over 2.4 million Top Shot NFT transactions to determine whether there is evidence of revealed racial preferences in the Top Shot market. Design/methodology/approach This study examines a data set of 2.43 million transactions from 28 July 2020 to 20 March 2021 using Ordinary Least Squares, Weighted Least Squares and Inverse Probability Weighting. Our models include indicator variables for the race of depicted players and examine estimated race coefficients for statistical significance and effect size. Findings Our results indicate that the National Basketball Association (NBA) Top Shot NFTs depicting Black players or Black/Mixed players trade for higher prices than those depicting White players, after controlling for other factors including on-court performance. While highly statistically significant, the effect sizes are below conventional thresholds for small effects. Practical implications Recent empirical studies present evidence suggesting that Black players may earn less than comparable White players. Our findings challenge implicit justifications for observed earning disparities based on consumer preference. Originality/value This study provides empirical analysis into revealed racial preference of consumers for sports memorabilia. It is the first to examine racial preference in NBA NFTs.