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Group identity in fairness decisions: discrimination or inequality aversion?

Author(s)
Carolyn Chisadza, Nicky Nicholls, Eleni Yitbarek
Publication date
September 2020

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.

Publication PDF
Series title
Policy Paper 24
Classification-JEL