Measuring Economic Discrimination of Hispanic-Owned Architecture and Engineering Firms in South Florida

Abstract

Using data developed for theU.S. District Court, this study compared the performance of Hispanic-owned firms and two groupings of non-Hispanic-owned firms in three South Florida markets: architecture (n= 176), structural engineering (n= 144), and civil engineering (n = 200). Within each market, firms’earnings are expressed as functions of longevity, production capacity, location, and whether the firm is owned by a woman. Separate earnings functions are developed for each ethnic classification, and a decomposition technique is applied to test for discrimination. The results show that the three markets do not convert firms’ characteristics into economic outcomes in the same manner for Hispanic and for non-Hispanic owners. The projected earnings of firms owned by Hispanics constitute a fraction of what non-Hispanic-owned firms with identical characteristics are expected to earn. Within each ethnic classification, the earnings of womenowned firms are lower than the earnings of firms with identical characteristics not owned by women.