Principles of Economics- Mankiw (5th) 419

Principles of Economics- Mankiw (5th) 419 - CHAPTER 19 E A...

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CHAPTER 19 EARNINGS AND DISCRIMINATION 431 with a greater proportion of white players. One interpretation of these facts is that customer discrimination makes black players less profitable than white players for team owners. In the presence of such customer discrimination, a discrimina- tory wage gap can persist, even if team owners care only about profit. A similar situation once existed for baseball players. A study using data from the late 1960s showed that black players earned less than comparable white players. Moreover, fewer fans attended games pitched by blacks than games pitched by whites, even though black pitchers had better records than white pitchers. Studies of more recent salaries in baseball, however, have found no evidence of discriminatory wage differentials. Another study, published in the Quarterly Journal of Economics in 1990, ex- amined the market prices of old baseball cards. This study found similar evi- dence of discrimination. The cards of black hitters sold for 10 percent less than the cards of comparable white hitters. The cards of black pitchers sold for 13
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This note was uploaded on 07/30/2010 for the course ECON 120 taught by Professor Abijian during the Spring '10 term at Mesa CC.

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