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Taste-based Discrimination: Empirical Evidence from a Shock to Preferences during WWI


  • Petra Moser

    () (Department of Economics, Stanford University)


A 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).

Suggested Citation

  • Petra Moser, 2009. "Taste-based Discrimination: Empirical Evidence from a Shock to Preferences during WWI," Discussion Papers 08-019, Stanford Institute for Economic Policy Research.
  • Handle: RePEc:sip:dpaper:08-019

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    References listed on IDEAS

    1. Greif, Avner, 1989. "Reputation and Coalitions in Medieval Trade: Evidence on the Maghribi Traders," The Journal of Economic History, Cambridge University Press, vol. 49(04), pages 857-882, December.
    2. Jeremy Edwards & Sheilagh Ogilvie, 2012. "Contract enforcement, institutions, and social capital: the Maghribi traders reappraised," Economic History Review, Economic History Society, vol. 65(2), pages 421-444, May.
    3. Greif, Avner, 1994. "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 912-950, October.
    4. Clay, Karen, 1997. "Trade without Law: Private-Order Institutions in Mexican California," Journal of Law, Economics, and Organization, Oxford University Press, vol. 13(1), pages 202-231, April.
    5. Reyerson, Kathryn, 2006. "Institutions and the Path to the Modern Economy: Lessons from Medieval Trade. By Avner Greif. Cambridge: Cambridge University Press, 2006. Pp. xix, 503. $34.99, paper," The Journal of Economic History, Cambridge University Press, vol. 66(04), pages 1080-1081, December.
    6. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-548, June.
    7. Greif, Avner, 1996. "The Study of Organizations and Evolving Organizational Forms through History: Reflections from the Late Medieval Family Firm," Industrial and Corporate Change, Oxford University Press, vol. 5(2), pages 473-501.
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    More about this item


    Taste-Based Discrimination; World War I; Shock to Preferences;

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination


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