Loss aversion in taste-based employee discrimination: Evidence from a choice experiment

Louis Lippens, Stijn Baert and Eva Derous

Economics Letters, 2021, vol. 208, issue C

Abstract: Using a choice experiment, we test whether taste-based employee discrimination against ethnic minorities is susceptible to loss aversion. In line with empirical evidence from previous research, our results indicate that introducing a hypothetical wage penalty for discriminatory choice behaviour lowers discrimination and that higher penalties have a greater effect. Most notably, we find that the propensity to discriminate is significantly lower when this penalty is loss-framed rather than gain-framed. From a policy perspective, it could therefore be more effective to financially penalise taste-based discriminators than to incentivise them not to discriminate.

Keywords: Taste-based discrimination; Employee discrimination; Loss aversion; Ethnicity (search for similar items in EconPapers)
JEL-codes: C91 J15 J71 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Loss Aversion in Taste-Based Employee Discrimination: Evidence from a Choice Experiment (2021)
Working Paper: Loss aversion in taste-based employee discrimination: Evidence from a choice experiment (2021)
Working Paper: Loss aversion in taste-based employee discrimination: Evidence from a choice experiment (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:208:y:2021:i:c:s016517652100358x

DOI: 10.1016/j.econlet.2021.110081

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