Animus or Beliefs? Consumer Discrimination In Uncertain Times
(Job Market Paper)
Abstract: Neither beliefs nor preferences are observed in most studies of discrimination, making it hard to discern the underlying motive. This study overcomes the challenge in a unique setting where motives prompt divergent responses. Using GPS mobile tracking data, I examine consumer discrimination against Chinese restaurants immediately following the first case of COVID-19. I adopt a simple identification strategy: a belief-driven discriminator, motivated by health concerns, discriminates only where there is elevated perceived risk of infection, whereas a taste-driven discriminator, motivated by ethnic animus, discriminates everywhere regardless of perceived risk. I rely on variation in service type to capture perceived health risk and variation in restaurant clientele to capture potential for anti-Chinese sentiment. I find strong evidence consistent with belief-based discrimination and inconsistent with taste-based discrimination.