Working Paper: NBER ID: w16382
Authors: Amitabh Chandra; Douglas O. Staiger
Abstract: We use simple economic insights to develop a framework for distinguishing between prejudice and statistical discrimination using observational data. We focus our inquiry on the enormous literature in healthcare where treatment disparities by race and gender are not explained by access, preferences, or severity. But treatment disparities, by themselves, cannot distinguish between two competing views of provider behavior. Physicians may consciously or unconsciously withhold treatment from minority groups despite similar benefits (prejudice) or because race and gender are associated with lower benefit from treatment (statistical discrimination). We demonstrate that these two views can only be distinguished using data on patient outcomes: for patients with the same propensity to be treated, prejudice implies a higher return from treatment for treated minorities, while statistical discrimination implies that returns are equalized. Using data on heart attack treatments, we do not find empirical support for prejudice-based explanations. Despite receiving less treatment, women and blacks receive slightly lower benefits from treatment, perhaps due to higher stroke risk, delays in seeking care, and providers over-treating minorities due to equity and liability concerns.
Keywords: No keywords provided
JEL Codes: I12; J15; J16; J71
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Prejudice (J71) | Higher return from treatment for treated minorities (J15) |
| Statistical discrimination (J71) | Equalized returns from treatment across groups with same propensity to be treated (C32) |
| Lower treatment rates (C22) | Lower benefits from treatment for women and blacks (J79) |
| Higher stroke risks and delays in seeking care (I11) | Lower benefits for women and blacks (J79) |
| Treatment on the treated parameter (C22) | No significant difference for women compared to men (J16) |
| Treatment on the treated parameter (C22) | No significant difference for blacks compared to whites (J79) |