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

Pascaline Dupas, Marcel Fafchamps and Laura Hernandez-Nunez

No 19092, CEPR Discussion Papers from Centre for Economic Policy Research

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, C\^ote 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.

Keywords: Stigma; Discrimination (search for similar items in EconPapers)
JEL-codes: D12 D63 J71 O12 (search for similar items in EconPapers)
Date: 2024-05
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Working Paper: Keeping Up Appearances: An Experimental Investigation of Socioeconomic Status Signaling to Avoid Discrimination (2024)
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