Keeping Up Appearances: An Experimental Investigation of Socioeconomic Status Signaling to Avoid Discrimination

Pascaline Dupas, Marcel Fafchamps and Laura Hernandez-Nunez

No 32491, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We investigate the welfare cost of relative rank considerations, using a series of vignettes and lab-in-the-field experiments with over 2,000 individuals in Abidjan, Côte d’Ivoire. We show that: (1) people perceived to be of very low rank are considered more likely to be sidelined from beneficial opportunities in many aspects of life; and (2) in response, people invest in their appearance and distort consumption choices in order to appear of higher rank. These effects are economically significant. As predicted by a simple signaling model, the distortion concerns people with low (but not too low) socio-economic status and the SES range concerned varies across types of beneficial opportunities.

JEL-codes: C90 D91 J70 (search for similar items in EconPapers)
Date: 2024-05
New Economics Papers: this item is included in nep-evo, nep-exp and nep-lma
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