Jeffrey Miron
A standard economic view holds that markets will moderate some kinds of discrimination because “profit” maximizing organizations will recognize that discrimination is costly to their bottom line or other goals.
A recent study looked at the integration of college football in the 1970s for supporting evidence. By comparing conference-wide rankings and team win percentages before and after a team integrated, the study found that
poorly performing teams, potentially seeking to improve their win rate, choose to integrate.
Also,
worse teams were more likely to integrate than better teams.… A likely explanation … is that poorly performing teams integrated to attract talented players.
These results indicate that
firms with low profits stop discriminating, or discriminate less, in a bid to increase profitability.
Somewhere, Gary Becker is smiling.
Cross-posted from Substack.