Inaccurate Statistical Discrimination: An Identification Problem

Aislinn Bohren, Kareem Haggag (), Alex Imas () and Devin Pope
Additional contact information
Kareem Haggag: Carnegie Mellon University
Alex Imas: Carnegie Mellon University

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: Discrimination---differential treatment by group identity---is widely studied in economics.Its source is often categorized as taste-based or statistical (belief-based)---a valuable distinction for policy design and welfare analysis. We argue that in many situations, individuals may have inaccurate beliefs about the relevant characteristics of different groups. This possibility creates an identification problem when isolating the source of discrimination. When not accounted for, we show both theoretically and experimentally that such inaccurate statistical discrimination will be misclassified as taste-based. A review of the empirical discrimination literature in economics reveals the scope of this issue: a small minority of papers---fewer than 7%---consider inaccurate beliefs. We then examine two alternative methodologies for differentiating between these three sources of discrimination---varying the amount of information presented to evaluators and eliciting evaluators' beliefs. We propose a possible intervention: when presented with accurate information, we show that inaccurate statistical discrimination decreases.

Keywords: Discrimination; Inaccurate Beliefs; Model misspecification (search for similar items in EconPapers)
JEL-codes: D90 J71 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2019-05-18, Revised 2020-07-17
New Economics Papers: this item is included in nep-exp, nep-hpe and nep-lma
References: Add references at CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
https://economics.sas.upenn.edu/system/files/worki ... per%20Submission.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
Working Paper: Inaccurate Statistical Discrimination: An Identification Problem (2019)
Working Paper: Inaccurate Statistical Discrimination: An Identification Problem (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:19-010

Access Statistics for this paper

More papers in PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania 133 South 36th Street, Philadelphia, PA 19104. Contact information at EDIRC.
Bibliographic data for series maintained by Administrator ().