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Statistical Discrimination or Prejudice? A Large Sample Field Experiment

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  • Michael Ewens
  • Bryan Tomlin
  • Liang Choon Wang

Abstract

A model of racial discrimination provides testable implications for two features of statistical discriminators: differential treatment of signals by race and heterogeneous experience that shapes perception. We construct an experiment in the U.S. rental apartment market that distinguishes statistical discrimination from taste-based discrimination. Responses from over 14,000 rental inquiries with varying applicant quality show that landlords treat identical information from applicants with African-American and white sounding names differently. This differential treatment varies by neighborhood racial composition and signal type in a way consistent with statistical discrimination and in contrast to patterns predicted by a model of taste-based discrimination.

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File URL: http://ewens.tepper.cmu.edu/papers/stat-disc.pdf
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Bibliographic Info

Paper provided by Carnegie Mellon University, Tepper School of Business in its series GSIA Working Papers with number 2012-E37.

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Handle: RePEc:cmu:gsiawp:-121416828

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Postal: Tepper School of Business, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, PA 15213-3890
Web page: http://www.tepper.cmu.edu/

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Web: http://student-3k.tepper.cmu.edu/gsiadoc/GSIA_WP.asp

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References

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  1. Balsa, Ana I. & McGuire, Thomas G., 2001. "Statistical discrimination in health care," Journal of Health Economics, Elsevier, vol. 20(6), pages 881-907, November.
  2. John A. List, 2004. "The Nature and Extent of Discrimination in the Marketplace: Evidence from the Field," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 49-89, February.
  3. Jennifer L. Doleac & Luke C.D. Stein, 2010. "The Visible Hand: Race and Online Market Outcomes," Discussion Papers 09-015, Stanford Institute for Economic Policy Research.
  4. Daniel Paravisini & Veronica Rappoport & Enrichetta Ravina, 2010. "Risk Aversion and Wealth: Evidence from Person-to-Person Lending Portfolios," NBER Working Papers 16063, National Bureau of Economic Research, Inc.
  5. Ahmed, Ali & Hammarstedt, Mats, 2007. "Discrimination in the housing market — a field experiment on the internet," CAFO Working Papers 2007:1, Centre for Labour Market Policy Research (CAFO), School of Business and Economics, Linnaeus University.
  6. Siddique, Zahra, 2008. "Caste Based Discrimination: Evidence and Policy," IZA Discussion Papers 3737, Institute for the Study of Labor (IZA).
  7. Kate L. Antonovics & Brian G. Knight, 2004. "A New Look at Racial Profiling: Evidence from the Boston Police Department," NBER Working Papers 10634, National Bureau of Economic Research, Inc.
  8. Bosch, Mariano & Carnero, M. Angeles & Farré, Lídia, 2010. "Information and discrimination in the rental housing market: Evidence from a field experiment," Regional Science and Urban Economics, Elsevier, vol. 40(1), pages 11-19, January.
  9. Ali M. Ahmed & Lina Andersson & Mats Hammarstedt, 2010. "Can Discrimination in the Housing Market Be Reduced by Increasing the Information about the Applicants?," Land Economics, University of Wisconsin Press, vol. 86(1), pages 79-90.
  10. Kate Antonovics & Peter Arcidiacono & Randall Walsh, 2005. "Games and Discrimination: Lessons From The Weakest Link," Journal of Human Resources, University of Wisconsin Press, vol. 40(4), pages 918-947.
  11. Ayres, Ian & Siegelman, Peter, 1995. "Race and Gender Discrimination in Bargaining for a New Car," American Economic Review, American Economic Association, vol. 85(3), pages 304-21, June.
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Cited by:
  1. Hanson, Andrew & Hawley, Zackary, 2014. "Where does racial discrimination occur? An experimental analysis across neighborhood and housing unit characteristics," Regional Science and Urban Economics, Elsevier, vol. 44(C), pages 94-106.
  2. Vanessa Scholes, 2014. "You Are Not Worth the Risk: Lawful Discrimination in Hiring," Rationality, Markets and Morals, Frankfurt School Verlag, Frankfurt School of Finance & Management, vol. 5(82), February.
  3. Carlsson, Magnus & Fumarco, Luca & Rooth, Dan-Olof, 2013. "Artifactual evidence of discrimination in correspondence studies? A replication of the Neumark method," POLIS Working Papers 172, Institute of Public Policy and Public Choice - POLIS.
  4. Patrick Bayer & Marcus D. Casey & Fernando Ferreira & Robert McMillan, 2012. "Estimating Racial Price Differentials in the Housing Market," NBER Working Papers 18069, National Bureau of Economic Research, Inc.

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