Question

What does it mean when neoclassical economists say that discriminators are willing to pay to discriminate?

Answer 1

Gary Becker (1957) in his "taste" model pioneered the study of discrimination in neoclassical economics and proposed that employers, workers or customers may have "taste" for discrimination which implies that discriminators are willing to pay to discriminate. An employer with a taste for discrimination against black people will not employ them unless they offer workers a wage low enough to offset the disutility they experienced by employing blacks.Some workers even discriminate to customer's or worker's tastes. In case of worker's tastes, it may be possible that white workers may demand higher wages to work with black people.