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

Petra Moser

No 08-019, Discussion Papers from Stanford Institute for Economic Policy Research

Abstract: 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).

Keywords: Taste-Based Discrimination; World War I; Shock to Preferences (search for similar items in EconPapers)
JEL-codes: J15 (search for similar items in EconPapers)
Date: 2009-01
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Persistent link: https://EconPapers.repec.org/RePEc:sip:dpaper:08-019

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