Economic consequences and the motive to discriminate
Journal
Administrative Science Quarterly
Subject
Strategy and Entrepreneurship
Publishing details
Authors / Editors
Stroube B
Biographies
Publication Year
2022
Abstract
Past research indicates that increasing the economic consequences of evaluations should theoretically discourage discrimination by making it more costly. In this paper I theorize that such consequences should also encourage discrimination in settings where evaluators may be motivated by performance expectations (e.g., stereotypes). I explore this theory using data from an online lending platform where a loan guarantee policy reduced the potential economic consequences of using borrower demographics during lending decisions. I find evidence that lenders evaluated female borrowers less favorably than male borrowers after the policy. This is consistent with the theory that the policy discouraged performance-motivated discrimination, while simultaneously encouraged consumption-motivated discrimination. Because I theorize about underlying motives for discrimination, the insights developed here should apply to a wide range of specific types of discrimination that vary according to these motives, including classic taste-based discrimination, homophily-driven discrimination, statistical discrimination, and status-based discrimination. Economic consequences may therefore represent an important dynamic link between different types of discrimination.
Available on ECCH
No
