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Statistical Discrimination or Prejudice? A Large Sample Field Experiment

Author

Listed:
  • Michael Ewens

    (Tepper School of Business, Carnegie Mellon University)

  • Bryan Tomlin

    (NERA Economic Consulting)

  • Liang Choon Wang

    (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 manner consistent with statistical discrimination and in contrast to patterns predicted by a model of taste-based discrimination. © 2014 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Michael Ewens & Bryan Tomlin & Liang Choon Wang, 2014. "Statistical Discrimination or Prejudice? A Large Sample Field Experiment," The Review of Economics and Statistics, MIT Press, vol. 96(1), pages 119-134, March.
  • Handle: RePEc:tpr:restat:v:96:y:2014:i:1:p:119-134
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    References listed on IDEAS

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    More about this item

    Keywords

    racial discrimination; prejudice; racism; rentals; landlords; housing;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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