The Pursuit of Happiness: A Calculation of the Hidden Costs of Being Black in the 21^st Century

There is no shortage of evidence documenting glaring disparities on important socioeconomic and health indicators between White and Black Americans. Persistent racial disparities are the consequence of a historic system of structural racism. Given ongoing inequities in nearly every realm of American life, we aim to calculate the contemporary cost of racial inequity. We contribute to a growing body of literature concerning the “hidden cost” of being Black by employing a novel methodological approach and centering a paradigm of intersectionality (Crenshaw, 1991; Shapiro, 2004). Specifically, we account for the disparities in health and income between Blacks and Whites by using the compensating and equivalent surplus frameworks to calculate willingness to accept (WTA) and willingness to pay (WTP) estimates. We estimate the WTP to avoid the disparity in health, income, and wellbeing between Black and White Americans, to be between approximately $38,000 and $45,000 per year per person using the Behavioral Risk Factor Surveillance System as well as the General Social Survey, respectively. These estimates can be interpreted as the annual willingness to pay by an average White person to avoid the disparities in income and health experienced by the average Black person.