Analyzing Information on Women-Owned Small Businesses in Federal Contracting (2005) / Chapter Skim
Currently Skimming:
5 Measuring Discrimination
5 Measuring Discrimination
Pages 67-78
The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.
From page 67... ...
This chapter briefly reviews methodological issues involved in explaining statistically measured disparities that are found in the use of women-owned small businesses in federal contracting. Research on factors that result in barriers for women-owned small businesses, including possible discriminatory practices or behaviors in the contracting process or discrimination in other domains, such as bank lending, seems useful to include in the longer term research agenda that we recommend that the SBA develop in this area (see Chapter 6)
|
From page 68... ...
Constitution or specific legislation under the "disparate treatment" legal standard. The second component includes instances in which treatment based on inadequately justified factors other than gender results in adverse consequences for women, such as a promotion practice that generates differential effects.2 A process with adverse consequences for women may or may not be considered discrimination under the law under the "disparate impact" legal standard, depending on whether there is a sufficiently compelling reason for its use and whether there are alternative processes that would not produce gender disparities.3 In the areas in which this type of discrimination is unlawful, the reason is to curtail the use of unintentional practices that can harm women, as well as to sanction intentional discrimination that might not be identified because of the difficulty in establishing intent in the legal setting.4 The social science definition of discrimination is broader than the legal standards of disparate treatment and disparate impact because it includes processes and behaviors that warrant attention by policy makers, even though they would not meet a legal standard of proof.
|
From page 69... ...
Field experiments, called audit studies, have been successfully used to examine race-based discrimination in housing markets by real estate firms. In these studies, prospective renters or buyers that have similar characteristics except for their race or ethnicity visit real estate offices to see how many referrals they are given and in what locations (see, e.g., National Research Council, 2002; Turner et al., 2002, 2003; Yinger, 1986, 1993, 1995)
|
From page 70... ...
Because federal contracting is the domain of most direct interest for the federal government, we primarily discuss the uses and limitations of statistical estimation methods for studying one or more aspects of the contracting process. That process includes not only the decision to accept or reject a bid, but also such decisions as whether to bundle agency requirements into fewer, larger procurements or more and smaller procurements, whether to add more work to existing contracts or let new contracts, what criteria to use and what weights to give to different criteria in making a contract award, and allocations of time and resources to reach out to various types of businesses with various methods to encourage them to register and become capable of federal contracting work.
|
From page 71... ...
The simplest formulation to compare outcomes for these two groups would be a regression model in which the dependent variable, Y, is the outcome of interest for each business, such as the amount of contract dollars won as reported in the Federal Procurement Data System (FPDS)
|
From page 72... ...
Moreover, when the model and the input data are problematic, caution must be used in interpreting the results with standard tests for statistical significance. Theory-Based Statistical Models Statistical decomposition of the factors affecting an outcome of interest, such as disparities between women-owned and other small businesses in dollars of federal contract awards, is a useful descriptive tool, providing such decomposition is carefully performed.
|
From page 73... ...
Interviews with contracting officials on important determinants of contracting success together with analysis of the types of firms that tend to win competitive contracts with specified features could suggest the characteristics of registered vendors for which data are needed as input to the model. Such characteristics might include not only standard measures of firm age and size, but also measures of facilities, equipment, geographic location, previous bids, previous successful bids and add-ons to existing contracts, previous business experience of key personnel, whether the firm qualifies as economically disadvantaged, and the like.
|
From page 74... ...
(However, the same caveats expressed above about making causal inferences from fitting multiple regression models to observational data apply to the use of matching methods with observational data.) Matching has been the subject of considerable research, and relatively sophisticated matching methods, such as propensity score matching, have been developed.
|
From page 75... ...
Firms with similar propensity scores are grouped into the same strata to create matched sets. In comparison to multiple regression, matching methods reduce the risk of imposing an inappropriate functional form on the relationship between the outcome variable and the observed covariates.
|
From page 76... ...
Natural experiments have a number of limitations for the study of discrimination: · The change under study may be endogenous -- that is, a reaction to particular circumstances that warranted a policy change or intervention. To the extent that discrimination against women-owned small businesses in contracting exists for industries designated as "underrepresented" but not other industries, then the estimated effect of comparing these industries with other industries before and after the policy change would tend to
|
From page 77... ...
(See Holzer and Ludwig, 2003, on the use of natural experiments to study discrimination; see Meyer, 1995, and Shadish, Cook, and Campbell, 2002, for a general discussion of the strengths and weaknesses of these designs.) Data Quality Careful assessment of the quality of input data would be critical for appropriate use of the statistical analysis methods discussed above, as would consideration of needed sample sizes.
|
From page 78... ...
that "the use of statistical models, such as multiple regressions, to draw valid inferences about discriminatory behavior requires appropriate data and methods, coupled with a sufficient understanding of the process being studied to justify the necessary assumptions." It is a challenging undertaking to analyze the possible role of discriminatory practices and behaviors at any point in the federal contracting process, let alone the chain from new business formation to registering and bidding to supply federal requirements. We believe that in-depth research on disparities and possible discrimination in the contracting process could usefully inform policy making, but such research should be viewed as a long-term investment on the part of the SBA and other interested agencies.
|
Key Terms
This material may be derived from roughly machine-read images, and so is provided only to facilitate research.
More
information on Chapter Skim is available.