Audit or paired-testing methodology is commonly used to measure the level or frequency of discrimination in particular markets, usually in the labor market or in housing (Ross, 2002; for a summary of paired-testing studies in the labor and housing markets, see Bendick et al., 1994; Fix et al., 1993; Neumark, 1996; Riach and Rich, 2002). Auditors or testers are randomly assigned to pairs (one of each race) and matched on equivalent characteristics (e.g., socioeconomic status), credentials (e.g., education), tastes, and market needs. Members of each pair are typically trained to act in a similar fashion and are equipped with identical supporting documents. To avoid research subjects becoming suspicious when they confront duplicate sets of supporting documents, researchers sometimes vary the documents while keeping them similar enough that the two testers have equivalent levels of support.
As part of the study, testers are sent sequentially to a series of relevant locations to obtain goods or services or to apply for employment, housing, or college admission (Dion, 2001; Esmail and Everington, 1993; Fix et al., 1993; National Research Council, 1989; Schuman et al., 1983; Turner et al., 1991a, 1991b; Yinger, 1995). The order of arrival at the location is randomly assigned. For example, in a study of hiring, testers have identical résumés and apply for jobs, whereas in a study of rental housing, they have identical rental histories and apply for housing. Once the study has been completed, researchers use the differences in treatment experienced by the testers as an estimate of discrimination.
To the extent that testers are matched on a relevant set of nonracial characteristics, systematic differences by the race of the testers can be used to measure discrimination on the basis of race. Propensity score matching is sometimes used when there are too many relevant characteristics on which to match on every one. In propensity score matching, an index of similarity is created by fitting a logistic regression with the outcome variable being race and the explanatory variables being the relevant characteristics on which one wishes to match. Subjects of one race are then paired or matched with subjects of the other race having similar fitted logit values—the pro-
In the following discussion on audit studies, we draw heavily on a commissioned paper by Ross and Yinger (2002) examining the challenges involved in measuring discrimination for both scholars and enforcement officials.
The term audit is used in a research context to refer to direct evidence of discrimination in a particular market (see Fix et al., 1993, for an overview of auditing). The term paired testing is used to refer to studies of discrimination conducted in an enforcement context to monitor civil rights compliance. Matching or pairing is also used more generally to refer to the widely used statistical method of comparing outcomes from individuals or groups of individuals that are similar in attributes other than the one of interest (e.g., race).