Paying for Mirrors or Windows? Consumer Discrimination and Hollywood Films

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 significa...