Abstract

https://ssrn.com/abstract=2738728
 


 



Testing the Theory of Consumer Discrimination as an Explanation for the Lack of Minority Hiring in Hollywood Films.


Venkat Kuppuswamy


University of North Carolina Kenan-Flagler Business School

Peter Younkin


McGill University - Desautels Faculty of Management

June 30, 2016


Abstract:     
Is employment discrimination driven by consumer bias rather than employer bias? One explanation for the persistence of employment discrimination, despite considerable legal and social pressure, is that unbiased employers are penalized by biased customers. An equitable employer is therefore a less profitable one, and apparent employer bias is more accurately described as reflected consumer antipathy. The empirical challenge of relating consumer behavior to employee composition has limited prior tests of this hypothesis and focused attention largely on employer behavior or structural factors. We provide a rare direct test of the claim that consumers respond to employee composition by evaluating the commercial and artistic performance of films released theatrically within the United States between 2011-2015 as a function of the racial diversity of their cast. We find that films are not penalized for the diversity of their casts; instead employing multiple black actors in the principal cast achieves significantly higher domestic box-office revenues than films with no black actors. Moreover, we find that international audiences do not exhibit evidence of bias against diverse casts, and that the net returns to diversity remain positive when worldwide box-office revenues are considered. We confirm the robustness of these results in a survey and experimental setting that controls for film-level differences, and through an analysis of a novel dataset capturing the social media activity (on Twitter) for each film by users of different races. Our findings advance an alternative interpretation of the consumer bias thesis, where consumers prefer employers reflect their world or values, rather than their traits.

Number of Pages in PDF File: 39

Keywords: racial discrimination, hollywood, customer, diversity, performance

JEL Classification: J15, L82, J7


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Date posted: February 29, 2016 ; Last revised: July 1, 2016

Suggested Citation

Kuppuswamy, Venkat and Younkin, Peter, Testing the Theory of Consumer Discrimination as an Explanation for the Lack of Minority Hiring in Hollywood Films. (June 30, 2016). Available at SSRN: https://ssrn.com/abstract=2738728 or http://dx.doi.org/10.2139/ssrn.2738728

Contact Information

Venkat Kuppuswamy (Contact Author)
University of North Carolina Kenan-Flagler Business School ( email )
Chapel Hill, NC 27599
United States

Peter Younkin
McGill University - Desautels Faculty of Management ( email )
1001 Sherbrooke St. West
Montreal, Quebec H3A1G5 H3A 2M1
Canada
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