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The nature and limits of Gary Becker’s theory of racial discrimination

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  • Sanford Ikeda

    (SUNY)

Abstract

To what extent does Gary Becker’s model of discrimination capture “the essence of prejudice and discrimination”? After providing a general outline of Becker’s original model and summarizing some subsequent developments, this paper takes a critical perspective on the model to suggest that the absence of imperfect information in his approach unhelpfully limits its explanatory power. Instead, an approach that allows for the possibility of genuine error and draws on Adam Smith’s analysis of the impact of markets on one’s moral sense offers a deeper, more realistic understanding of what it means for people to express their prejudice (or not) through their choices.

Suggested Citation

  • Sanford Ikeda, 2018. "The nature and limits of Gary Becker’s theory of racial discrimination," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 31(4), pages 403-417, December.
    • Handle: RePEc:kap:revaec:v:31:y:2018:i:4:d:10.1007_s11138-018-0420-9
    DOI: 10.1007/s11138-018-0420-9
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    References listed on IDEAS

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    1. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162.
    2. Becker, Gary S, 1993. "Nobel Lecture: The Economic Way of Looking at Behavior," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 385-409, June.
    3. Marshall, Ray, 1974. "The Economics of Racial Discrimination: A Survey," Journal of Economic Literature, American Economic Association, vol. 12(3), pages 849-871, September.
    4. Michael Ewens & Bryan Tomlin & Liang Choon Wang, 2014. "Statistical Discrimination or Prejudice? A Large Sample Field Experiment," The Review of Economics and Statistics, MIT Press, vol. 96(1), pages 119-134, March.
    5. Friedman, Milton, 1966. "Essays in Positive Economics," University of Chicago Press Economics Books, University of Chicago Press, number 9780226264035.
    6. Donald Dewey, 1952. "Negro Employment in Southern Industry," Journal of Political Economy, University of Chicago Press, vol. 60(4), pages 279-279.
    7. Peter Lewin, 2000. "William Hutt and the Economics of Apartheid," Constitutional Political Economy, Springer, vol. 11(3), pages 255-264, September.
    8. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
    9. Anne O. Krueger, 1963. "The Economics of Discrimination," Journal of Political Economy, University of Chicago Press, vol. 71(5), pages 481-481.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Gary Becker; Discrimination; Prejudice; Imperfect knowledge; Choice; Adam smith; Prudence;
    All these keywords.

    JEL classification:

    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • D89 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Other
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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