Racial Bias in Motor Vehicle Searches: Additional Theory and Evidence

Knowles, Persico, and Todd (2001) develop a model of police search and offender behavior. Their model implies that if police are unprejudiced the rate of guilt should not vary across groups. Using data from Interstate 95 in Maryland, they find equal guilt rates for African-Americans and whites and conclude that the data is not consistent with racial prejudice against African-Americans. This paper generalizes the model of Knowles, Persico, and Todd by accounting for the fact that potential offenders are frequently not observed by the police and by including two different levels of offense severity. The paper shows that for African-American males the data is consistent with prejudice against African-American males, no prejudice, and reverse discrimination depending on the form of equilibria that exists in the economy. Additional analyses based on stratification by type of vehicle and time of day were conducted, but did not shed any light on the form of equilibria that best represents the situation in Maryland during the sample period.

Liberalization, Ownership, and Efficiency in Indian Banking: A Nonparametric Approach

This paper empirically estimates and analyzes various efficiency scores of Indian banks during 1997-2003 using data envelopment analysis (DEA). During the 1990s India's financial sector underwent a process of gradual liberalization aimed at strengthening and improving the operational efficiency of the financial system. It is observed, none the less, that Indian banks are still not much differentiated in terms of input or output oriented technical efficiency and cost efficiency. However, they differ sharply in respect of revenue and profit efficiencies. The results provide interesting insight into the empirical correlates of efficiency scores of Indian banks. Bank size, ownership, and the fact of its being listed on the stock exchange are some of the factors that are found to have positive impact on the average profit efficiency and to some extent revenue efficiency scores are. Finally, we observe that the median efficiency scores of Indian banks in general and of bigger banks in particular have improved considerably during the post-reform period.