Discrimination at Bars

I am an exchange student from Iceland and my stay here has been really enjoyable but there is one thing that has happened to me that really gets on my nerves. For the first month that I lived here I had no problems adjusting to life here and things were going good. But then came October 10th. It was a Saturday and the Buckeyes were playing Wisconsin that day. My day started out going to Giant Eagle to buy some groceries and while I was there I decided to buy beer. I was asked for an ID at the counter and since I am 22 years old this was no problem at all until the cashier told me that they couldn‘t accept my ID since it was not issued by the US government. He said it was a store policy but I probably could buy it if I had my passport on me. Since I don‘t carry my passport around everywhere I had to skip buying the beer. I didn‘t care that much about it at the time since I could always go somewhere else to buy it. The Buckeyes game resulted in a basic victory but after the game there was another similar story. Me and couple of other European exchange students were going to celebrate the victory at a bar. We decided to go to The Little Bar on High Street. The place was packed with people and when we tried to go inside we were denied access by an employee because we were not from the USA. Actually a girl in front of us was also denied access because she had a drivers license from Indiana, the reason she got was that she was not from Ohio.

Denying people access to bars based on where people are from makes absolutely no sense at all. If we look at this then we can see that the marginal cost of granting someone access is basically zero if we assume that the person doesn‘t do any damage to the bar‘s property. In this particular case the only exception I could make is not allowing people from Wisconsin access since they might cause some ruckus and start a fight with OSU fans. Apart from some rowdy Wisconsin fans being disappointed with their teams loss there is no logical reason not to allow people not from Ohio into the bar. In our case the bar was turning down the business of 6 international students wanting to drink some beer. We ended up going to another bar to consume our alcohol and making some other bar owner happy of the amount of alcohol we bought.

The same thing happened to us a few weeks later at another bar that we had never been to. This however was a Thursday night but the same thing happened. I was pretty frustrated about not being able to go to a bar because I was not from Ohio and started arguing with the manager. Since you Americans like to sue people for pretty much every possible thing, I told him that this was discrimination and that we could sue the bar for it. He countered with the argument that their license didn‘t allow them to serve alcohol to people not possessing a US government issued ID. I was really not in the mood for arguing with him so we left but this made me think of his argument a little bit. Since their license doesn‘t allow them to serve alcohol to us how come almost every other bar in town can do so? It might be that there are a couple of different licenses available, some "better" than others and this bar had a license of "lesser" value than the other bars. The other option could be that every bar has the same kind of license and the other bars don‘t enforce the non government issued ID clause in their license and hope they won‘t get caught.

If the bar in question does indeed have a "lesser" license than the other bars why doesn‘t it upgrade its license to that of the other bars? This would decrease (increase might be a better word, I‘m not sure) their current constraint that they have of only allowing Americans to enter the bar. Increasing their potential customer capacity could only be beneficial to the bar since the potential to earn more money would increase. I would imagine upgrading the current license would come at some cost but this cost would probably incur only once and the bar would quickly earn enough money to cover that cost. If every bar has the same license why don‘t the others enforce this part of their license? They probably are thinking that this is such a minor part and the police will never enforce it since there are more serious matters that they have to get to before they start keeping foreigners from drinking alcohol at bars. One other thing about this is the fact that in most countries in Europe for example the legal age for buying beer is 16 years old so the Europeans should be very used to consuming alcohol by the time they turn 21 and can go to bars here.

I would say it is clear that the bar owners who deny people not from Ohio access to their bars are not very good at running their business since they are not maximizing their profits when they deny people access based on where they are from. While price discrimination for a monopoly can be socially optimal if done correctly this kind of discrimination clearly is not the best action an owner can make since the effect is that his potential customers go to his competitors.