Empirical Evidence-Numbers are just Numbers-Empirical evidence is the data that come from observing the real world. Empirical evidence can include the actual employment and wages for workers. While both are useful, sometimes theory and empirical evidence don’t line up. Example: Wage for White vs. Blacks, may not be discrimination but rather just skill, education, connections, etc. Economic Theory Economic theory is the analytic/mathematical description of economic markets. Economic theory uses concepts like demand and supply to make predictions about various phenomena, e.g. the employment and wages we might expect for workers. While theory can be very complex, it is often a simplification of the behavior it tries to explain. Economic Discrimination Defn: Otherwise identical individuals are treated differently w/in an economic market based on some easily identified trait or characteristic Majority of discrimination is in the form of wages, but also employment, benefits, treatment, etc.- Why we care: Discrimination causes inefficiencies within the market Taste Based Discrimination (Graph Section 1) Taste-based discrimination results when someone (e.g. coworkers, customers, owners) dislikes members of a particular group enough to change their economics behavior (e.g. stop working, stop buying, and stop hiring). Note that taste-based discrimination predict the market will naturally eliminate discrimination.- It’s segregation when the MRP’s are equal
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