|dc.description.abstract||This dissertation is made up of three essays that examine racial and gender differentials
in labor and housing markets.
The first essay uses unique data on local television news to examine how firms may
compete via employee differentiation in response to customer prejudice. The results
indicate that there is a negative correlation between the racial, gender, and age
composition of competing stations. Moreover, the ratings data suggest that the
stations with relatively few blacks on-air are catering to the more discriminatory
customers. While a similar result is found for age and gender, the reverse holds for
other groups, suggesting possible tastes for diversity for Hispanics and Asians. Taken
as a whole, the evidence supports a new theoretical model in which firms differentiate
via the characteristics of their employees in response to customer prejudice.
The second essay disentagles the relationship between race, neighborhood characteristics,
and housing prices. Because race and neighborhood characteristics are
strongly correlated, studies of racial housing price differentials have yielded results
that vary widely depending on the types of neighborhood controls used. This paper
shows that even with relatively thorough neighborhood controls, there is still
evidence that correlation between the error term and regressors is a source of bias.
While recent studies have tended to find evidence of a negative premium for blacks,
fixed effects estimates in this paper indicate that black owners pay premiums of
around 10 percent for housing. Moreover, house values decline in neighborhoods as
the percentage of blacks increases, suggesting prejudicial attitudes.
The third essay examines the labor market effects of Proposition 209, which ended
state affirmative action programs in California. I use Current Population Survey
(CPS) data and triple difference techniques to take advantage of the natural experiment
presented by this change in state law to gauge the labor market impacts of
ending affirmative action programs. There appears to have been little change in the
relative unemployment rates of women and minorities, but labor force participation
declined sharply. This decline suggests that either affirmative action programs in
California had been inefficient or that they failed to create lasting change in prejudicial