Citation

Verdier T, Zenou Y. Int. Econ. Rev. 2004; 45(3): 731-760.

Copyright

(Copyright © 2004, Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association, Publisher John Wiley and Sons)

DOI

10.1111/j.0020-6598.2004.00285.x

PMID

unavailable

Abstract

This article provides a unified explanation for why blacks commit more crime, are located in poorer neighborhoods, and receive lower wages than whites. If everybody believes that blacks are more criminal than whites--even if there is no basis for this--then blacks are offered lower wages and, as a result, locate further away from jobs. Distant residence increases even more the black-white wage gap because of more tiredness and higher commuting costs. Blacks have thus a lower opportunity cost of committing crime and become indeed more criminal than whites. Therefore, beliefs are self-fulfilling.