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Identifying Taste-Based Discrimination: Effect of Black Electoral Victories on Racial Prejudice and Economic Gaps

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Abstract

I test for the causal impact of Black electoral victories in local elections on White Americans’ attitude toward Black Americans. Using Race Implicit Attitude Test scores as a measure of racial prejudice and close-election regression-discontinuity design for causal inference, I find Black electoral victories cause measures of racial bias to rise, by 4% of the average Black-White difference in IAT scores. Simultaneously, they widen racial gaps in unemployment and mortgage denials. Interpreting these close electoral victories as instrumental variables, I find a large causal effect of prejudice-based racial discrimination on Black-White economic gaps.

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  • Jung Sakong, 2021. "Identifying Taste-Based Discrimination: Effect of Black Electoral Victories on Racial Prejudice and Economic Gaps," Working Paper Series WP-2021-07, Federal Reserve Bank of Chicago.
    • Handle: RePEc:fip:fedhwp:92065
    DOI: 10.21033/wp-2021-07
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    More about this item

    Keywords

    Racial discrimination; Racial discrimination Regression discontinuity;

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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