Labor Market Discrimination and Capital Investment: The Effects of Fan Discrimination on Stadium Investment
AbstractWe investigate the possibility that labor market discrimination affects economic outcomes in the complementary capital market. Previous research contains ample theoretical justification, and empirical evidence, that discrimination affects wages and employment in labor markets. However, the effects of discrimination against minority labor on transactions in markets for other inputs used in production are not known. We develop a model of the optimal capital stock put in place in the presence of customer discrimination and test this model using data on sports facility construction over the period 1950-2004. The empirical evidence suggests that teams in cities with more racial segregation spend less on sports facilities, confirming the predictions of the model about the effect of customer discrimination on capital investment.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4551.
Length: 25 pages
Date of creation: Nov 2009
Date of revision:
Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Find related papers by JEL classification:
- J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-11-27 (All new papers)
- NEP-LAB-2009-11-27 (Labour Economics)
- NEP-SPO-2009-11-27 (Sports & Economics)
- NEP-URE-2009-11-27 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stefan Szymanski, 2000. "A Market Test for Discrimination in the English Professional Soccer Leagues," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 108(3), pages 590-603, June.
- Chirinko, Robert S, 1993. "Business Fixed Investment Spending: Modeling Strategies, Empirical Results, and Policy Implications," Journal of Economic Literature, American Economic Association, vol. 31(4), pages 1875-1911, December.
- Dennis Coates, 2007. "Stadiums And Arenas: Economic Development Or Economic Redistribution?," Contemporary Economic Policy, Western Economic Association International, vol. 25(4), pages 565-577, October.
- David M. Cutler & Edward L. Glaeser & Jacob L. Vigdor, 1999.
"The Rise and Decline of the American Ghetto,"
Journal of Political Economy, University of Chicago Press,
University of Chicago Press, vol. 107(3), pages 455-506, June.
- David M. Cutler & Edward L. Glaeser & Jacob L. Vigdor, 1997. "The Rise and Decline of the American Ghetto," NBER Working Papers 5881, National Bureau of Economic Research, Inc.
- Cutler, David & Vigdor, Jacob & Glaeser, Edward, 1999. "The Rise and Decline of the American Ghetto," Scholarly Articles 2770033, Harvard University Department of Economics.
- Brian L. Goff & Robert E. McCormick & Robert D. Tollison, 2002. "Racial Integration as an Innovation: Empirical Evidence from Sports Leagues," American Economic Review, American Economic Association, American Economic Association, vol. 92(1), pages 16-26, March.
- Bodvarsson, Orn B. & Partridge, Mark D., 2001. "A supply and demand model of co-worker, employer and customer discrimination," Labour Economics, Elsevier, Elsevier, vol. 8(3), pages 389-416, June.
- Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226041162.
- J. Brian O'Roark, 2001. "Capital Structure and Team Performance in Professional Baseball," Journal of Sports Economics, , vol. 2(2), pages 168-180, May.
- Peter A. Groothuis & J. Richard Hill, 2004. "Exit Discrimination in the NBA: A Duration Analysis of Career Length," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 42(2), pages 341-349, April.
- Lawrence M. Kahn, 1991. "Discrimination in professional sports: A survey of the literature," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 44(3), pages 395-418, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).
If references are entirely missing, you can add them using this form.