Taste-based Discrimination in Diverse Settings

Dawid Walentek, Natalia Letki & Ulf Liebe

Separating taste-based and statistical discrimination

• Observational data: conflating characteristics
• Experimental: external validity

Identifying the mechanisms of discrimination

• In-group favouritism
• Out-group bias

Research Design

• Pre-registered experiment
• 816 respondents in the UK
• 12 incentivised choices over pairs of participants
• Payout determined by joint economic characteristics
  • one round paid out
• profiles generated with a conjoint algorithm
  • orthogonality
  • matching

Research Design

Research Design

Group 1

Taste-based discrimination

• Decrease in the role of economic characteristics in Group 3
• 8 percentage points decrease for productivity
• 5 percentage points decrease for endowment 

In-group & out-group dynamics

• In-group favouritism across all ethnicities and experimental groups
  • bar Black African in Group 2
• Out-group bias towards Asian respondents across all ethnicities in Group 3
  • and among White British in Group 2

Gender & Education 

• Further evidence of favouritism
• Particular effect of higher education

Exploring intersectionality

• Pooled group 2&3 without Asian respondents
• Asian respondents without a degree 6 percentage points less likely to be selected
• Asian men without a degree 8 percentage points less likely to be selected (relative to Asian men with a degree)

Conclusion

• Conditionality results in discriminatory and economically sub-optimal outcomes
  • Potentially driven by beliefs that other participants follow background cues in their decisions
• In-group favouritism and out-group bias motivate taste-based discrimination
  • Persistent in-group favouritism & out- group bias targeted only towards Asian participant

  • White British shows both in-group favouritism and out-group bias towards Asian respondents in G2&3

• Higher education suppresses discrimination towards Asian respondents