What is "economics of discrimination"

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I was doing some research on discrimination for an upcoming journal article I am writing and came across a specialty called "economics of discrimination." By the way our own Professor Bill Dickens specializes in this field and is an expert. I am hoping Bill and others can discuss economics of discrimination. Thanks

-- Anonymous, March 14, 2003


It's important to point out at the outset that discrimination in economics looks at dissimilar treatment to "equals". The popular temptation is to infer discrimation as the root cause for observable differences such as higher black unemployment rates, home mortgage rejection rates or incarceration rates. Often the messy combination of theoretical modelling and empirical tests contradict our popular but passionate convictions. Differences may not imply discrimination.

When sophisticated econometric models are used to test for the existence of discrimination, relevant characteristics are properly controlled for in order to achieve statistical equality between the obersvable groups. For example, if two recently minted Stanford J.D.s receive employment packages from a prominent NY law firm yet the white applicant gets a higher compensation package than the black applicant and all other prodictivity factors are equal a case can be made that this constitutes prima facie evidence of discrimination. However, if another white applicant is Yale educated and the black applicant recieved his degree from a good but 2nd tier Law School, the case for discrimation is more problematic.

The economics of discrimination examines the causes and consequences of disparate treatment to market participants distinguished by ascriptive features such as race, gender or sexual orientation when all other relevant productivity characteristics are roughly equal. Under normal market arrangements discrimination would atrophy or disappear because profit opportunites would exist such that the group which is equal in productivity traits would be cheaper (i.e. discriminated group) and will find expanded employment, housing or educational opportunities. Free markets, allegedly, are not conducive for discriminatory behavior because such actions signal that the perpetrators are willingly foregoing profit opportunities (inconsistent outcomes for capitalist instincts). According to the free market approach, discrimination is irrational.

Research in this field over the last three decades has essentially focused on the rational foundations for discrimination to occur under an economic regime characterized by free market forces. While many free market economists reject this area of scholarship (Gary Becker- Univ of Chicago or Thomas Sowell-Stanford) the theoretical improvements and empirical results are quite impressive. Some of the best minds in economics are actively involved in this line of research (W. Darity-UNC, S. Myers-UM & G. Loury-Boston U). If you desire additional information please consult my forthcoming book which will have a chapter on this topic. QED

-- Anonymous, March 17, 2003

Bro. Bill Wow!! Thank you so much for answering my question I am working on an article in regard to Nubia and Egypt 600 AD and will be looking at the economics of Nubia. Nubia was a vital trading area with Egypt taking a lot of it's gold back to Egypt. So economic discrimination is one area I wanted to look at in terms of survival of civilizations. The field of ECONOMIC DISCREMINATION is one that as A.M.E's we should be discussing on a regular basis and also have an understanding of. How can we talk about or seek economic development if we do not understand these practices in business world. Many of our districts are working on helping our members buy first time homes, we are also talking about our own insurance company etc. This is a timely topic and I hope you will continue to address it on the forum. I was thrilled to find out that my biological brother is an expert in this field. When I was looking for sources your name came up! And I did not know you were on the governor's advisory board of economics. There are some heavy weights on the board. Brother Bill thank you for the exciting work that you are doing for it will help your sister the egyptologist with my work. Please help our denomination understand our role and place in the world when it comes to economics. You rock brother Bill!

-- Anonymous, March 17, 2003

Rev. Rogers,

I wish you were my pastor!!!


-- Anonymous, March 17, 2003

Jazzman, I tried to send you a private email but it came back to me. I will be your friend and other pastor. I have been so blessed by this discussion board to have friends that are also pastors to me. Thanks for the compliment.

-- Anonymous, March 17, 2003

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