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

Louis Lippens, Stijn Baert () and Eva Derous
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Eva Derous: -

Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration

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)
Pages: 516 pages
Date: 2021-06
New Economics Papers: this item is included in nep-upt and nep-ure
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Journal Article: Loss aversion in taste-based employee discrimination: Evidence from a choice experiment (2021) Downloads
Working Paper: Loss Aversion in Taste-Based Employee Discrimination: Evidence from a Choice Experiment (2021) Downloads
Working Paper: Loss aversion in taste-based employee discrimination: Evidence from a choice experiment (2021) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:rug:rugwps:21/1016

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