ProjectCustomer Discrimination and Quality Signals Study IDsspp-2021-0025-v1 Study Title
Customer Discrimination and Quality Signals: A Field Experiment with Healthcare Shoppers AuthorsAlex Chan Completion Time10 Minutes Close DateAug. 14, 2021 DisciplineEconomics FieldHealth Economics, Labor Economics, Experimental Economics CountryUnited States, Online (many countries) Abstract In this paper, I evaluate customer preferences in the field with an online platform where cash paying consumers can shop and book a provider for medical procedures. I address whether customers discriminate against doctors on the basis of race and to what extent is such discrimination statistical. Literature has suggested two fundamental mechanisms for discrimination: statistical discrimination and taste-based discrimination . Taste-based discrimination theory suggests that customers chooses as if there is a dis-utility of associating with a particular racial group. Even with perfect information, taste- based discrimination cannot be eliminated. Unlike taste-based discrimination, statistical discrimination can be eliminated when enough information is shared to signal quality and therefore the value of a prospective purchase to customers, because they can rely on information other than race to update their beliefs about the doctor. A critical test for whether discrimination is statistical in nature is to see whether the introduction of an economically relevant signal closes the racial gap. I seek to distinguish between these forms of discrimination by comparing the willingness to pay penalty for Black or Asian doctors in the case where no quality signals are provided against the case where quality signals are provided. (J71, I11, L15, L86, M31)
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