An Observational Implementation of the Outcome Test with an Application to Ethnic Prejudice in Pretrial Detentions

Nicolas Grau and Damián Vergara

Working Papers from University of Chile, Department of Economics

Abstract: We propose an observational implementation of the outcome test that uses predicted selection status to identify marginal individuals. We provide conditions under which selected individuals with lower propensity scores are more likely to be marginal given their observables and propose empirical diagnostics to assess their plausibility. Our approach requires neither instruments nor the random assignment of decision-makers, allows for unrestricted correlation between observables and unobservables, and can accommodate non-monotone patterns of discrimination. We illustrate our method by analyzing prejudice in pretrial detentions against the Mapuche, the largest ethnic minority group in Chile, and find strong evidence of prejudice against them.

Pages: 69 pages
Date: 2021-03
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Citations: View citations in EconPapers (3)

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