The Price of Prejudice

Jean-Robert Tyran and Morten Hedegaard

No 9953, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We present a new type of field experiment to investigate ethnic prejudice in the workplace. Our design allows us to study how potential discriminators respond to changes in the cost of discrimination. We find that ethnic discrimination is common but remarkably responsive to the "price of prejudice", i.e. to the opportunity cost of choosing a less productive worker on ethnic grounds. In addition, we find that the standard theory of statistical discrimination fails to explain observed choices, and that taking ethnic prejudice into account helps to predict the incidence of discrimination.

Keywords: Discrimination; Field experiment; Labor market (search for similar items in EconPapers)
JEL-codes: C93 J71 (search for similar items in EconPapers)
Date: 2014-04
New Economics Papers: this item is included in nep-exp and nep-lab
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: The Price of Prejudice (2018)
Working Paper: The Price of Prejudice (2014)
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