Blaming the Customer: The Effect of Cast Racial Diversity on the Performance of Hollywood Films

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Authors: Venkat Kuppuswamy, Peter Younkin 

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. We provide a rare direct test of the claim that consumers change their spending patterns in relation to employee composition by evaluating the commercial and artistic performance of all films released theatrically within the United States between 2011-2015 as a function of the racial diversity of their cast. We find that employing black actors for less prominent roles has no effect on either outcome. However, we find that films employing multiple black actors in leading roles achieve significantly higher domestic box-office revenues (149% higher) than films with no black actors. Moreover, this higher commercial performance domestically does not occur at the expense of artistic success or international box-office appeal. Specifically, we find no evidence of a penalty with respect to Academy Award nominations or international film revenues for films with more black actors. These results indicate that the persistent underemployment of minorities in Hollywood is not the product of consumer discrimination.

Read full article: Social Science Research Network, 26 February, 2016