Determining the Extent of Statistical Discrimination : Evidence from a Field Experiment in India

In order to determine the relative size of taste-based and statistical discrimination, we develop a simple model to distinguish these two theories. We then test the model's predictions of caste-based discrimination by conducting a field experiment that elicits patients' rankings of physicians of different castes and years of experience in the healthcare market in India. We also run a survey and conduct lab-in-the-field experiments to measure patients' attitudes towards different caste groups. We find that 47 to 80 percent of patients statistically discriminate physicians. The overwhelming size of statistical discrimination has important implications for the use of Affirmative Action policies in India