Price Discrimination? Racial Discrimination?

From a reader named Philip Mulder comes this photograph:

Philip says this is a hair-cutting joint in Washington, D.C. As you can see, it offers a 50% discount if your name is -- in this case -- Amanda, Rachel, Katie, Peter, Andrew, or David. I don't have my master database of black-white names handy (hey, it's summer), but I'm pretty sure that at least five out of those six skew pretty white. So, a couple of questions:

The Economics of Higher Education, Part 3: Why Do Fewer Blacks Graduate?

The black-white education gap has been widely observed at many age levels. In a new working paper called "Race and College Success" (abstract; PDF), Peter Arcidiacono and Cory Koedel examine why blacks who are admitted to college are so much less likely than whites to graduate:

Conditional on enrollment, African American students are substantially less likely to graduate from 4-year public universities than white students.*  Using administrative micro data from Missouri, we decompose the graduation gap between African Americans and whites into four factors:  (1) racial differences in how students sort to universities, (2) racial differences in how students sort to initial majors, (3) racial differences in school quality prior to entry, and (4) racial differences in other observed pre-entry skills.  Pre-entry skills explain 65 and 86 percent of the gap for women and men respectively.  A small role is found for differential sorting into college, particularly for women, and this is driven by African Americans being disproportionately represented at urban schools and the schools at the very bottom of the quality distribution.

* "At around 40 percent, six-year graduation rates for African Americans are over twenty percentage points lower than for whites (DeAngelo et al., 2011, National Center for Education Statistics, 2012)."

More on the Google AdWords Controversy

A reader named Desmond Lawrence writes from London with further commentary on our "How Much Does Your Name Matter" podcast -- specifically, about Harvard computer scientist Latanya Sweeney's research which found that online searches for people with distinctively black names was 25% more likely to produce an ad suggesting the person had an arrest record – regardless of whether that person had actually been arrested:

So when I was listening to your podcast on “How Much Does Your Name Matter?” I was surprised to hear about Latanya and her story about these Google Ads that were being served.
 
Now as much as the company Instant Checkmate would like to say that they are not at fault here, I can guarantee that I know what has happened with their AdWords campaign.
 
When you set up an AdWords campaign you tend to do a fair bit of research. From there you will build a campaign around Broad match, phrase match or even exact match.
 
You can also do a thing called Dynamic keyword insertion. Now this is where I would suggest that Instant Checkmate went wrong. If you place the Dynamic keyword call code into an ad, it will place the keyword that has called the ad into the ad, thus increasing the effectiveness of the ad.

Discriminating Software

The Economist takes a look at the software that big companies are using to sort through job applicants. It finds that people who use Chrome and Firefox browsers are better employees, and people with criminal records are suited to work in call centers. One drawback to having a computer sort potential employees is that its algorithms may treat some variables as proxies for race, as discussed in our "How Much Does Your Name Matter?" podcast, in which the Harvard computer scientist Latanya Sweeney found that distinctively black names are more likely to draw ads that offer arrest records. 

What Happens When You Get Rid of Affirmative Action?

A new working paper (abstract; PDF) by economists Peter Arcidiacono, Esteban Aucejo, Patrick Coate, and V. Joseph Hotz looks at the effects of California's Proposition 209 on university matching:

Proposition 209 banned using racial preferences in admissions at California's public colleges. We analyze unique data for all applicants and enrollees within the University of California (UC) system before and after Prop 209. After Prop 209, graduation rates of minorities increased by 4.4%. We characterize conditions required for better matching of students to campuses to account for this increase. We find that Prop 209 did improve matching and this improvement was important for the graduation gains experienced by less-prepared students. At the same time, better matching only explains about 20% of the overall graduation rate increase. Changes after Prop 209 in the selectivity of enrolled students explains 34-50% of the increase. Finally, it appears UC campuses responded to Prop 209 by doing more to help retain and graduate its students, which explains between 30-46% of the post-Prop 209 improvement in the graduation rate of minorities.

One caveat: the study doesn't address outcomes for students who didn't attend University of California schools as a result of the change.

Jacky Kaba Keeps Writing Interesting Papers on Race

I blogged a few years ago about Amadu Jacky Kaba under the headline "A Scholar to Keep Your Eye On":

Amadu Jacky Kaba is a Liberian-born striver who first came to Seton Hall University as a basketball player and, several degrees later, has returned as an assistant professor of sociology and anthropology. Like our friend Roland Fryer, Kaba is a black scholar who studies a lot of racial issues with a perspective and a latitude that is unavailable to white scholars.

If indeed you had kept your eye on Kaba, you would have seen that he keeps writing lots (and lots) of interesting papers.

For White Girls, a Bigger Penalty for Being Obese

We hear increasingly about the healthcare costs of obesity; but what about social costs?

A forthcoming Economics and Human Biology paper (abstract here; PDF here) by Mir Ali, Aliaksandr Amialchuk, and John Rizzo, titled "The Influence of Body Weight on Social Network Ties Among Adolescents," makes this interesting argument:

We find that obese adolescents have fewer friends and are less socially integrated than their non-obese counterparts. We also find that such penalties in friendship networks are present among whites but not African-Americans or Hispanics, with the largest effect among white females.

Explaining the Black-White Wage Gap

As of 2010, black men in America earned 74.5 percent of a typical white man's wage; black women earned 69.6 percent. A new paper from Harvard's Roland Fryer (certified genius), Princeton's Devah Pager and Jorg L. Spenkuch of the University of Chicago examines some of the factors driving the black-white wage gap.

Using data from unemployed workers in New Jersey who sought employment for up to 12 weeks, the authors show that racial discrimination accounts for one-third of the wage difference. They also estimate that blacks have a 7 percent lower reservation wage than their white counterparts at a comparable job that demands a comparable skill level. Fryer and his colleagues control for skill level by measuring the job applicants' wage at their previous job against the wage they were seeking.

Here’s the abstract:

Physical Activity During the Recession: More Voluntary Exercise, Less Exertion

Last month, we wrote about data pulled from the American Time Use Survey (ATUS), examining how Americans spend their lost work hours during the recession. While 32% of foregone work hours were spent watching TV and sleeping (not great, though sleeping is helpful), 15% of that time went to “other leisure,” among which, there is "listening to music" and "being on the computer," as well as "exercise and recreation."

Two new studies (both coauthored by Dhaval M. Dave of Bentley University) drill further into that ATUS data to paint a more complete picture of our exercise and physical activity habits, and ultimately, what impact they have on our health. The first finds that during the recession, we engage in more voluntary exercise, but have less exertion. Part of this has to do with the difference between exercise and physical activity -- the latter is seen as the healthier of the two. (Better to walk to work everyday than do sit-ups twice a week.) With the loss of work, comes a loss of physical activity -- particularly with the types of jobs we've lost.

Do We Overvalue Our Desire to Live Among People of Our Own Race?

A new working paper from a quartet of economists proposes a new method of estimating how we value the "non-marketed amenities" of neighborhood choices such as avoiding pollution and living among people of our own race. The old static method, they say, underestimates our willingness to pay to avoid air pollution and crime, but overstates how much we value living near neighbors of our own race. Here's the abstract: