An Empirical Test of Taste-based Discrimination Changes in Ethnic Preferences and their Effect on Admissions to the NYSE during World War I
AbstractA significant challenge to empirically testing theories of discrimination has been the difficulty of identifying taste-based discrimination and of distinguishing it clearly from statistical discrimination. This paper addresses this problem through a two-part empirical test of taste-based discrimination. First, it constructs measures of revealed preferences, which establish that World War I created a strong and persistent shock to ethnic preferences that effectively switched the status of German Americans to an ethnic minority. Second, the paper uses this shock to ethnic preferences to identify the effects of taste-based discrimination at the example of traders at the New York Stock Exchange (NYSE). A new data set of more than 4,000 applications for seats on the NYSE reveals that the War more than doubled the probability that German applicants would be rejected (relative to Anglo-Saxons). The mechanism of taste-based discrimination is surprising: Prices are unaffected by ethnic preferences, and discrimination operates instead entirely through admissions.
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 National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14003.
Date of creation: May 2008
Date of revision:
Note: DAE LS
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- J7 - Labor and Demographic Economics - - Labor Discrimination
- N22 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: 1913-
- N42 - Economic History - - Government, War, Law, International Relations, and Regulation - - - U.S.; Canada: 1913-
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Francisco Galarza & Gustavo Yamada, 2012. "Labor Market Discrimination in Lima, Peru: Evidence from a Field Experiment," Working Papers 12-03, Departamento de Economía, Universidad del Pacífico, revised Mar 2012.
- Francisco Galarza & Liuba Kogan & Gustavo Yamada, 2011. "¿Existe discriminación en el mercado laboral de Lima Metropolitana? Un análisis experimental," Working Papers 11-15, Departamento de Economía, Universidad del Pacífico, revised Dec 2011.
If references are entirely missing, you can add them using this form.