Dan McGee - The Economics of Implicit bias: Theory and Evidence
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Author: Dan McGee
Abstract: I develop and test a novel theory of the origins and consequences of implicit bias in a segregated society. In the model, boundedly-rational individuals may follow impulses to discriminate when deliberation is costly. Hence, implicit discrimination arises in environments of high cognitive cost and is distinct from taste-based or statistical discrimination. The underlying biases are shaped by the individual's social environment and experiences: bad experiences worsen implicit biases while good experiences reduce them. I show that when agents are segregated and learn about outgroups secondhand through stories shared by others or the media, they can arrive at an implicit prejudice despite their personal experiences, amplifying the welfare cost of bounded rationality. Using a decade of Implicit Association Test data, I find evidence that residential racial segregation causally increases anti-Black implicit bias as predicted by the model. Consistent with the proposed mechanism, I show that cognitive effort mitigates the effect of racial segregation, whereas exposure to distorted media images of Black Americans amplifies bias.
Host: James Choy (York)
Cluster: EHPE
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