Working Paper: NBER ID: w18093
Authors: Marco Castillo; Ragan Petrie; Máximo Torero; Lise Vesterlund
Abstract: We examine gender differences in bargaining outcomes in a highly competitive and commonly used market: the taxi market in Lima, Peru. Examining the entire path of negotiation we find that men face higher initial prices and rejection rates. These differentials are consistent with both statistical and taste-based discrimination. To identify the source of the inferior treatment of men we conduct an experiment where passengers send a signal on valuation before negotiating. The signal eliminates gender differences and the response is shown only to be consistent with statistical discrimination. Our study secures identification within the market of interest and demonstrates that there are environments where sophisticated statistical inference is the sole source of differential gender outcomes.
Keywords: Gender; Bargaining; Discrimination; Field Experiment; Taxi Market
JEL Codes: C78; C93; J16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Statistical discrimination (J71) | Higher initial prices for men (J79) |
| Statistical discrimination (J71) | Higher rejection rates for men (J16) |
| Statistical discrimination (J71) | Gender gap in prices (J16) |
| Statistical discrimination (J71) | Gender gap in final prices accepted by drivers (J79) |
| Passenger signaling (R41) | Elimination of gender differences in bargaining outcomes (C79) |
| Statistical discrimination (J71) | Gender gap in bargaining outcomes (C79) |
| Initial gender gap (J16) | Perceived valuation by drivers (R48) |
| Initial gender gap (J16) | Statistical discrimination (J71) |