PIPE* Workshop: Trevon Logan, Ohio State

Competition and Discrimination in Public Accommodations: Evidence from the Green Books

This project seeks to determine the role of market factors in the provision of non-discriminatory services before federal legislation forbade racial discrimination in public accommodations.

Using a new county-level dataset constructed from the “Negro Motorist Green Books” on the number of non-discriminatory public accommodations from 1939 to 1955, we show that exogenous changes in the White population led to increases in non-discriminatory firms in the post-war era. To explore the role of consumer discrimination as the mechanism behind this result, we present a model of firm discrimination where a fraction of White consumers have discriminatory preferences. The model captures the relationship between the ratio of Black to White consumers and the ratio of non-discriminatory to discriminatory firms in a local market.

Using the number of White casualties in World War II as an instrument for the change in the Black to White population ratio, we isolate the effect of a change in the racial composition of consumers on the incentives for firms to discriminate. We find that a 1% increase in the ratio of Black to White consumers leads to a 2% increase in the ratio of non-discriminatory to discriminatory firms.

While our results show that there were marginal firm responses to market conditions, ending racial discrimination in public accommodations required federal intervention.

Trevon Logan is the Hazel C. Youngberg Distinguished Professor of Economics at Ohio State University. Professor Logan specializes in economic history, economic demography and applied microeconomics.

Discussant:  Neil Malhotra, professor of political economy at Stanford

This is a Political Institutions and Political Economy Collaborative event.