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Belief systems and durable inequalities : an experimental investigation of Indian caste


  • Hoff, Karla
  • Pandey, Priyanka


If discrimination against an historically oppressed social group is dismantled, will the group forge ahead? The authors present experimental evidence that a history of social and legal disabilities may have persistent effects on a group's earnings through its impact on individuals'expectations. In the first experiment, 321 high-caste and 321 low-caste junior high school male student volunteers in rural India performed the task of solving mazes under economic incentives. There were no caste differences in performance when caste was not publicly revealed, but making caste salient created a large and robust caste gap. When a nonhuman factor influencing rewards (a random draw) was introduced, the caste gap disappeared. To test whether the low caste's anticipation of prejudicial treatment caused the caste gap, the authors conducted a second experiment that manipulated the scope for discretion in rewarding performance. When the link between performance and payoffs was purely mechanical, making caste salient did not affect behavior. Instead, it was in the case where there was scope for discretion and judgment in rewarding performance that making caste salient had an effect. The results suggest that when caste identity is salient, low-caste subjects expect that others will judge them prejudicially. Mistrust undermines motivation. The experimental design enables the authors to exclude as explanations of the caste gap in performance socioeconomic differences and a lack of self-confidence by low-caste participants.

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  • Hoff, Karla & Pandey, Priyanka, 2004. "Belief systems and durable inequalities : an experimental investigation of Indian caste," Policy Research Working Paper Series 3351, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3351

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    1. Booth, Alison & Nolen, Patrick, 2012. "Choosing to compete: How different are girls and boys?," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 542-555.
    2. Bernard, Tanguy & Dercon, Stefan & Taffesse, Alemayehu Seyoum, 2011. "Beyond fatalism: An empirical exploration of self-efficacy and aspirations failure in Ethiopia," IFPRI discussion papers 1101, International Food Policy Research Institute (IFPRI).
    3. Azariadis, Costas & Stachurski, John, 2005. "Poverty Traps," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 5 Elsevier.
    4. Burns, Justine, 2012. "Race, diversity and pro-social behavior in a segmented society," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 366-378.
    5. Michael Marmot & Ruth Bell & Angela Donkin, 2013. "Tackling Structural and Social Issues to Reduce Inequities in Children’s Outcomes in Low- to Middle-income Countries," Papers indipa708, Innocenti Discussion Papers.
    6. Afridi, Farzana & Li, Sherry Xin & Ren, Yufei, 2015. "Social identity and inequality: The impact of China's hukou system," Journal of Public Economics, Elsevier, vol. 123(C), pages 17-29.
    7. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2006. "Does Culture Affect Economic Outcomes?," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 23-48, Spring.
    8. Deepa Narayan & Lant Pritchett & Soumya Kapoor, 2009. "Moving Out of Poverty : Volume 2. Success from the Bottom Up," World Bank Publications, The World Bank, number 11838, March.
    9. repec:hal:wpaper:halshs-01349350 is not listed on IDEAS
    10. Ryo Horii & Masaru Sasaki, 2012. "Dual Poverty Trap: Intra‐ and Intergenerational Linkages in Frictional Labor Markets," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(1), pages 131-160, February.
    11. François Bourguignon & Francisco Ferreira & Michael Walton, 2007. "Equity, efficiency and inequality traps: A research agenda," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(2), pages 235-256, August.
    12. Dasgupta, Utteeyo & Mani, Subha & Singh, Prakarsh, 2016. "Searching for Religious Discrimination among Anganwadi Workers in India: An Experimental Investigation," IZA Discussion Papers 10048, Institute for the Study of Labor (IZA).
    13. Wendy Janssens, 2005. "Measuring Externalities in Program Evaluation," Tinbergen Institute Discussion Papers 05-017/2, Tinbergen Institute, revised 30 Mar 2006.
    14. Basu, Kaushik, 2006. "Participatory Equity, Identity, and Productivity: Policy Implications for Promoting Development," Working Papers 06-06, Cornell University, Center for Analytic Economics.
    15. Maitreyi Bordia Das & Soumya Kapoor Mehta, 2012. "Poverty and Social Exclusion in India," World Bank Other Operational Studies 26336, The World Bank.
    16. Karla Hoff & Priyanka Pandey, 2006. "Discrimination, Social Identity, and Durable Inequalities," American Economic Review, American Economic Association, vol. 96(2), pages 206-211, May.
    17. Carlsson, Fredrik & Gupta, Gautam & Johansson-Stenman, Olof, 2005. "Keeping Up with the Vaishyas: Caste and Relative Standing," Working Papers in Economics 171, University of Gothenburg, Department of Economics.
    18. Prerna Singh & Dean Spears, 2017. "How status inequality between ethnic groups affects public goods provision: Experimental evidence on caste and tolerance for teacher absenteeism in India," WIDER Working Paper Series 129, World Institute for Development Economic Research (UNU-WIDER).
    19. Juan Pérez Velasco Pavón, 2014. "Economic behavior of indigenous peoples: the Mexican case," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 23(1), pages 1-58, December.
    20. Rik Linssen & Luuk Kempen & Gerbert Kraaykamp, 2011. "Subjective Well-being in Rural India: The Curse of Conspicuous Consumption," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 101(1), pages 57-72, March.
    21. Ryo Horii & Masaru Sasaki, 2006. "Dual Poverty Trap," Discussion Papers in Economics and Business 06-12, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
    22. Das,Maitreyi B, 2015. "All in my head ? the play of exclusion and discrimination in the labor market," Policy Research Working Paper Series 7468, The World Bank.
    23. World Bank, 2011. "Perspectives on Poverty in India : Stylized Facts from Survey Data," World Bank Publications, The World Bank, number 2299, March.
    24. Patrinos, Harry Anthony & Skoufias, Emmanuel & Lunde, Trine, 2007. "Indigenous peoples in Latin America : economic opportunities and social networks," Policy Research Working Paper Series 4227, The World Bank.
    25. Alice Nicole Sindzingre, 2007. "Poverty traps: a perspective from development economics," EconomiX Working Papers 2007-26, University of Paris Nanterre, EconomiX.


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