Title: Obama Effect on Economic Outcomes: Evidence from Event Studies
Authors: Stefano Dellavigna
Racial differences in economic outcomes are wide-spread and persistent. Theories of discrimination and of identity posit that these differences are partly the effect of perceptions---of discrimination and of identity. In this paper, I study the impact of an event that has plausibly changed the perceptions of what African Americans can achieve: Barack Obama's election. I use an event study methodology and focus on key election events, such as the first primary victory (Jan. `08), the convention (Aug. `08), the general election (Nov. `08) and the inauguration (Jan. `09). I consider first the impact on a measure of discrimination, racial bias in traffic stops in Illinois. I find evidence of discrimination against Blacks, but the extent of discrimination does not change with the Obama events. I then consider the impact on crime rates, labor force participation, applications to Law School, contribution to public goods (measured by organ donations), and time spent in investment activities. Across these outcomes, I do not find any evidence that the Obama election events had an immediate impact on these outcomes for Blacks (compared to Whites). While the Obama election could change beliefs over the longer term, in the short-term it does not appear to have changed behavior.