Taste-based Discrimination: Empirical Evidence from a Shock to Preferences during WWI
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 identifies taste-based discrimination through a two-part empirical test. First, it constructs quantitative measures of revealed preferences, which establish that World War I created a persistent change in ethnic preferences that switched the status of German Americans from a mainstream ethnicity to an ethnic minority until the late 1920s. Second, the paper uses this shock to preferences to identify the effects of taste-based discrimination on traders at the New York Stock Exchange (NYSE). A new data set of more than 5,000 applications for membership in the NYSE reveals that the War more than doubled the probability that applicants with German-sounding names would be rejected (relative to Anglo-Saxons).
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Bibliographic InfoPaper provided by Stanford Institute for Economic Policy Research in its series Discussion Papers with number 08-019.
Date of creation: Jan 2009
Date of revision:
Taste-Based Discrimination; World War I; Shock to Preferences;
Find related papers by JEL classification:
- J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
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