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LABOR MARKET DISCRIMINATION AND CAPITAL: THE EFFECTS OF FAN DISCRIMINATION ON STADIUM AND ARENA CONSTRUCTION
Author(s) -
BODVARSSON ÖRN B.,
HUMPHREYS BRAD R.
Publication year - 2013
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.2011.00303.x
Subject(s) - economics , stadium , capital (architecture) , labour economics , population , production (economics) , microeconomics , geometry , mathematics , demography , archaeology , sociology , history
We investigate the possibility that labor market discrimination affects capital. Previous research indicates that discrimination affects wages and employment in labor markets. However, the effects of discrimination on other inputs to production are not known. We develop a model of the optimal capital stock in the presence of customer discrimination and test this model using data on sports facility construction. The empirical evidence suggests that teams in cities with a larger white population and more racial segregation put less capital in place, confirming the predictions of the model about the effect of customer discrimination on capital inputs . ( JEL J7, D24, L83)