Document Type

Working Paper

Publication Date

5-1-2003

SSRN Discipline

Legal Scholarship Network; Experimental & Empirical Studies eJournals; Law School Research Papers - Legal Studies; LSN Subject Matter eJournals; Law School Research Papers - Public Law & Legal Theory; Law School Research Papers - Law & Economics

Abstract

We collected data on over 1000 taxicab rides in New Haven CT in 2001 After controlling for a host of other variables we find two potential racial disparities in tipping 1 AfricanAmerican cab drivers were tipped approximately onethird less than white cab drivers and 2 AfricanAmerican passengers tipped approximately onehalf the amount of white passengers AfricanAmerican passengers are 37 times more likely than white passengers to leave no tipMany studies have documented seller discrimination against consumers but this study tests and finds that consumers discriminate based on the sellers race AfricanAmerican passengers also participated in the racial discrimination While AfricanAmerican passengers generally tipped less they also tipped black drivers approximately onethird less than they tipped white driversThe finding that AfricanAmerican passengers tend to tip less may not be robust to including better controls for passenger social class But it is still possible to test for the racialized inference that cab drivers who also could not directly observe passenger income might make Regressions suggest that a rational statistical discriminator would expect African Americans to tip 565 less than white passengersThese findings suggest that governmentmandated tipping via a tip included decal might reduce two different types of disparate treatment First mandated tipping would directly reduce the passenger discrimination against black drivers documented in this study Second mandated tipping might indirectly reduce the widelydocumented tendency of drivers to refuse to pick up black passengers

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