The economic effect of discrimination: Evidence from the restaurant sector

Abstract

AbstractDiscrimination often leads to economic consequences for affected groups. This study examines the economic impact of consumer discrimination on Chinese restaurants in the U.S. during the COVID‐19 pandemic's onset. Using cell phone data and revenue records, it identifies a significant −10% relative decline in visits to Chinese restaurants by April 2020, resulting in a $35 million loss. The study finds supply‐side factors, such as restaurant closures and online business transitions, had limited impact, highlighting demand‐side factors like county‐level political affiliation, racial diversity, and Asian population ratios as significant contributors.