After studying this chapter you will be able to: Understand how income inequality is measured, understand how wealth inequality is measured, explain why income and wealth inequality exists in the United States, enumerate and explain the costs and benefits of income equality,. | Chapter 29 Race and Affirmative Action Chapter Outline MEASURES OF INEQUALITY, AND DEFINITIONS AND DETECTION OF DISCRIMINATION DISCRIMINATION IN LABOR, CONSUMPTION AND LENDING AFFIRMATIVE ACTION Measures of Social and Economic Conditions African-American family income is rising. The relative position of African-American family income to white family income has risen slowly. Rates of poverty and unemployment are much higher for African-Americans than whites. More African-American men are in prison than in college. What is Discrimination Disparate Treatment Discrimination treating two otherwise equal people differently on the basis of race Adverse Impact Discrimination doing something that is not necessarily discriminatory on its face but that impacts some groups more negatively than others Rational or Statistical Discrimination discrimination that is based on sound statistical evidence and is consistent with profit maximization Measuring and Detecting Discrimination Regression . | Chapter 29 Race and Affirmative Action Chapter Outline MEASURES OF INEQUALITY, AND DEFINITIONS AND DETECTION OF DISCRIMINATION DISCRIMINATION IN LABOR, CONSUMPTION AND LENDING AFFIRMATIVE ACTION Measures of Social and Economic Conditions African-American family income is rising. The relative position of African-American family income to white family income has risen slowly. Rates of poverty and unemployment are much higher for African-Americans than whites. More African-American men are in prison than in college. What is Discrimination Disparate Treatment Discrimination treating two otherwise equal people differently on the basis of race Adverse Impact Discrimination doing something that is not necessarily discriminatory on its face but that impacts some groups more negatively than others Rational or Statistical Discrimination discrimination that is based on sound statistical evidence and is consistent with profit maximization Measuring and Detecting Discrimination Regression techniques Statistical methods which seek to determine if the differences in treatment for whites and blacks could have happened by random chance. Auditing techniques Sending paid actors into a situation to determine if people with identical economic characteristics are treated differently based on race. Labor Market Discrimination in the Past Modeling Labor Market Discrimination Labor market for jobs only whites are allowed do. Wage SND D wND Labor market for jobs that blacks who work must do. Wage SND D SD SD wwhite wblack Why Competition Would Eliminate Discriminatory Pay Businesses that hired only whites at the higher wage would have higher costs than businesses that did not discriminate. Businesses that did not discriminate could lower their prices and take the market share of those firms that did discriminate. As this happened firms would see that discrimination was not consistent with maximizing profits and would stop discriminating. Why Competition Would Not Necessarily Eliminate .
