For example, for as long as wages have been measured, women have been estimated to earn less than men, although the gap has lessened over time and among some groups (see, e.g., Bureau of Labor Statistics, 2002). By occupation, adult women currently outnumber adult men in such occupations as nurses, elementary school teachers, social workers, bank tellers, and librarians, whereas men outnumber women in such occupations as purchasing managers, dentists, carpenters, firefighters, and mail carriers. By industry, more women are employed than men in the health care and education sectors and more men are employed in agriculture, construction, and mining (U.S. Census Bureau, 2003:Tables 615, 619). Properly measured, these examples illustrate disparities on the basis of gender.

The Small Business Reauthorization Act of 2000, Section 811(m), required the SBA to determine industries in which women-owned small businesses were “underrepresented” and “substantially underrepresented.” In other words, SBA was required to identify industries that evidenced disparities or differentials between women-owned small businesses and other businesses in which the disparity was adverse to women-owned small businesses.

Disparity Ratio

Congress did not indicate how to measure disparities, adverse or otherwise. Studies of preferential contracting programs commonly use a measure termed the “disparity ratio,” D. Calculating the disparity ratio begins by calculating the values of two shares for a target group, in this case women-owned small businesses. The two shares are a utilization share, U, and an availability share, A.1 The utilization share looks at an outcome of interest, which in this case is winning government contracts, measured in number of contracts or dollars awarded. The utilization share measures contracts (or dollars) awarded to women-owned small businesses, Cw, as a share of total contracts (or dollars) awarded, Ct. The availability share looks at the available universe or pool for contracting, measured as numbers of businesses or gross dollar receipts. The availability share measures women-owned small businesses (or their gross receipts), W, as a share of total businesses (or total gross receipts), T. Taking the two shares as a ratio gives an estimated value for the disparity ratio:


The terms “utilization” and “availability” are defined in the disparity ratio literature, which has addressed primarily minority contracting disparities (see, e.g., Enchautegui et al., 1997; Marcus Weiss & Affiliates, 1990; Mason Tillman Associates, 1998).

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