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What Is Known about Testing for Discrimination: Lessons Learned by Comparing across Different Markets

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  • Stephen L. Ross

    (University of Connecticut)

Abstract

The paper provides a fairly comprehensive examination of recent empirical work on discrimination within economics. The three major analytical approaches considered are traditional regression analysis of outcomes, paired testing or audits, and finally analysis of performance where higher group performance suggests that a group has been treated disfavorably. The review covers research in the labor, credit, and consumption markets, as well as recent studies of discrimination within the legal system. The review suggests that the validity of interpreting observed racial differences as discrimination depends heavily on whether the analysis is based on a sample that is representative of a population of individuals or households or based on a sample of market transactions, as well as the analyst?s ability to control for heterogeneity within that sample. Heterogeneous firm behavior and differentiated products, such as those found in labor and housing markets, also can confound empirical analyses of discrimination by confusing the allocation of individuals across firms or products with disparate treatment or by ignoring disparate impacts that might arise based on that allocation.

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Bibliographic Info

Paper provided by University of Connecticut, Department of Economics in its series Working papers with number 2003-21.

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Length: 90 pages
Date of creation: Aug 2003
Date of revision: Nov 2003
Handle: RePEc:uct:uconnp:2003-21

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Cited by:
  1. Shamena Anwar & Hanming Fang, 2004. "An Alternative Test of Racial Prejudice in Motor Vehicle Searches: Theory and Evidence," Cowles Foundation Discussion Papers 1464, Cowles Foundation for Research in Economics, Yale University.
  2. Chris Edmond & Laura Veldkamp, 2008. "Income Dispersion and Counter-Cyclical Markups," NBER Working Papers 14452, National Bureau of Economic Research, Inc.
  3. John J. Donohue III, 2005. "The Law and Economics of Antidiscrimination Law," NBER Working Papers 11631, National Bureau of Economic Research, Inc.

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