Taste-based discrimination
Taste-based discrimination is an economic model of
Taste-based discrimination can be observed from the side of employers, customers or co-workers. In the case of an employer's "taste for discrimination", the employer aims to avoid non-monetary costs and does so often based on his own preferences. In the case of co-workers and customers, they may not want to interact with people belonging to a certain group, which the employer considers during the hiring process.
History
The taste-based discrimination model was first proposed by Gary Becker in 1957 in his book The economics of discrimination.[3] Becker argued that the reasons for such discrimination should be determined by psychologists and sociologists, not by economists, and he sought only to determine the consequences of discrimination as manifested in economic decision-making.[5] The early version of this model was criticized for failing to explain the continued existence of discriminating firms, because it predicts that these firms will be less profitable than their non-discriminating counterparts.[6] Nevertheless, the taste-based model has since become the predominant economic explanation for discriminatory practices.[5]
Distinguishing from statistical discrimination
It is difficult for economists to distinguish between taste-based and statistical discrimination.[7] A paper in 2008 studied the effect World War I had on German Americans as traders at the New York Stock Exchange. [7] The German Americans were discriminated against as a consequence of the war and were considered an ethnic minority, creating opportunity for taste-based discrimination in the trade market. The results showed that the discrimination indeed had an effect on the German Americans in the NYSE, where the rates of their rejection doubled. However, the discrimination had no effects on the price of NYSE seats.[7]
In 2014, researchers from the Center for Economic and Policy Research conducted a study of the Fantasy Premier League, which is an online game where players choose their 15 players from 20 participant Premier League teams. Since this is a virtual game, the players are able to discriminate without real life consequences. There are no real customers and the "workers" (players) do not interact. This allowed the research team to control for statistical discrimination, because all information about potential employees' productivity is publicly disclosed. The results showed that the research subjects were choosing players based on their performance, which is measured in points, and the race of the players did not play a role. The research was done over a period of three years and no evidence of taste-based discrimination was found.[8]
References
- S2CID 154444808.
- ISSN 0362-4331. Retrieved 2018-02-03.
- ^ .
- ^ Autor, David (2003-11-24). "Lecture Note: The Economics of Discrimination — Theory".
- ^ a b "Discrimination, Taste For". International Encyclopedia of the Social Sciences. 2008.
- .
- ^ .
- ^ Bryson, Alex; Chevalier, Arnaud (2014-08-15). "Is there a 'taste for discrimination'?". VoxEU.org. Retrieved 2018-02-03.