Working Paper: NBER ID: w9962
Authors: Howard Bodenhorn; Christopher S. Ruebeck
Abstract: Economic and social theorists have modeled race and ethnicity as a form of personal identity produced in recognition of the costliness of adopting and maintaining a specific identity. These models of racial and ethnic identity recognize that race and ethnicity is potentially endogenous because racial and ethnic identities are fluid. We look at the free African-American population in the mid-nineteenth century to investigate the costs and benefits of adopting alternative racial identities. We model the choice as an extensive-form game, where whites choose to accept or reject a separate mulatto identity and mixed race individuals then choose whether or not to adopt that mulatto identity. Adopting a mulatto identity generates pecuniary gains, but imposes psychic costs. Our empirical results imply that race is contextual and that there was a large pecuniary benefit to adopting a mixed-race identity.
Keywords: race; identity; economics; endogeneity; mixed-race
JEL Codes: N3; J7
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| adopting a mulatto identity (J15) | wealth accumulation (E21) |
| presence of other mulattos in the community (J79) | likelihood of identifying as mulatto (J79) |
| size of African American community (R23) | likelihood of identifying as mulatto (J79) |
| racial identification (J15) | wealth gap (D31) |