Group identity in fairness decisions: discrimination or inequality aversion?

30 September 2020
Publication Type: Policy Paper
JEL Code: D64, D87, D90, E62, J15

This paper investigates issues of decision time and race in distributive fairness decisions in South Africa. We conduct a dictator game where we gather data on transfer amounts and time taken for decisions, where dictators are paired with a series of partners with whom they either share or do not share race. Our results are not in line with the empirical evidence that suggests that impulsive decisions are fair: transfers increase with decision time, with fairer decisions taking longer than more selfish decisions. We note significantly higher transfers to black receivers from black decision-makers. White dictators give more to white receivers in very short (<15 second) decisions, but when they take more time to decide on a transfer, more is given to black versus white receivers. This race-based discrimination in transfers appears to be motivated largely by inequality aversion: black receivers are (correctly) assumed to have lower income than their white peers. This willingness to reduce perceived race-based inequality has encouraging implications for redistributive policies in the country.

Policy Paper 24
1 September 2020
Journal: Journal of Behavioral and Experimental Economics
1 August 2021