Revised City of South Bend Disparity Study Report

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CCS of South Bend Disparity Study 2020 small number of observations restricted our ability to produce reliable estimates of any industry sector below the aggregation level of All Industries. One method of exploring differences in economic outcomes is to examine the rate at which different demographic groups form businesses. We developed these business formation rates using data from the U.S. Bureau of the Census' American Community Survey. Table 5-4 presents these results. The table indicates that White men have higher business formation rates compared to all other groups except for Asians. Table 5-5 utilizes probit regression analysis to examine the prob- ability of forming a business after controlling for important factors beyond race and gender. 148 This table indicates that Blacks, Latinos, and White women are less likely to form businesses compared to similarly situated White men. The reduced probabilities of business formation were 2.8 percent for Blacks and 1.8 percent for Latinos and White women. These results for Blacks and White women were statis- tically significant at the 0.001 level; the results for Latino were statistically signifi- cant at the 0.01 level. Another way to measure equity is to examine how the wage and salary incomes and business earnings of particular demographic groups com- pare to White men. Multiple regression statistical techniques allowed us to exam- ine the impact of race and gender on economic outcome while controlling for other factors, such as education, that might impact outcomes. 149 Tables 5-6 and 5-7 present this data on wage and salary incomes and business earnings respec- tively. Table 5-6 indicates that non -Whites and White women earn less than White men. The reduction in earnings range from 35.6 percent to 14.6 percent and all of the results are statistically significant at the 0.001 level. Table 5-7 indicates that except for Asians and Others, non -Whites and White women receive business earnings less than White men. However, only the result for White women are sta- tistically significant at the 0.001 level.150 Table 5-4: Business Formation Rates All Industries, 2012 - 2016 Demographic Black 1.3% Latino 2.0% Native American 1.8% Asian/Pacific Islander 4.6% Other 2.4% 148. Appendix B provides a "Further Explanation of Probit Regression Analysis." 149. See Appendix A for more information an multiple regression statistical analysis. 150. The proper way to interpret a coefficient that Is less than -100 percent like the value of the coefficient for Native Ameri- can in Table 5-7, is the percentage is the amount non-M/WBEs earn more than the group in question. In this case, non- M/WBEs earn 572 percent more than Native American. 0 2020 Colette Holt & Associates, All Rights Reserved. 79