TY  - JOUR
AU  - Wolfers,Justin
TI  - Diagnosing Discrimination: Stock Returns and CEO Gender
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11989
PY  - 2006
Y2  - January 2006
UR  - http://www.nber.org/papers/w11989
L1  - http://www.nber.org/papers/w11989.pdf
N1  - Author contact info:
Justin Wolfers
Department of Economics
University of Michigan
611 Tappan St
Lorch Hall #319
Ann Arbor, MI 48104
Tel: 734-764-2447
E-Mail: jwolfers@umich.edu
AB  - A vast labor literature has found evidence of a %u201Cglass ceiling%u201D, whereby women are under-represented among senior management.  A key question remains the extent to which this reflects unobserved differences in productivity, preferences, prejudice, or systematically biased beliefs about the ability of female managers.  Disentangling these theories would require data on productivity, on the preferences of those who interact with managers, and on perceptions of productivity.  Financial markets provide continuous measures of the market%u2019s perception of the value of firms, taking account of the beliefs of market participants about the ability of men and women in senior management.  As such, financial data hold the promise of potentially providing insight into the presence of mistake-based discrimination.  Specifically if female-headed firms were systematically under-estimated, this would suggest that female-headed firms would outperform expectations, yielding excess returns.  Examining data on S&P 1500 firms over the period 1992-2004 I find no systematic differences in returns to holding stock in female-headed firms, although this result reflects the weak statistical power of our test, rather than a strong inference that financial markets either do or do not under-estimate female CEOs.
ER  -