Animus or Beliefs? Consumer Discrimination In Uncertain Times
Job Market Paper (January 2024)
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 by testing two plausible motives in consumer discrimination following the first case of COVID-19. Did consumers avoid Chinese restaurants due to belief-based concerns over virus risks or due to anti-Chinese sentiment? Using foot-traffic data on the universe of US restaurants, I exploit variation in service type to capture perceived health risks and variation in the ethnic mix of customers to capture anti-Chinese sentiment. I find strong evidence consistent with belief-based discrimination and inconsistent with taste-based discrimination.