In the 1950’s and 60s there was a concerted Marxist-led effort by psychologists to prove that people with “racist” attitudes were psychologically maladjusted. The fact that the whole world had been racist up until the war didn’t seem to hold them up any.

Reality triumphed eventually however and psychology textbooks these days routinely concede that some form of “in group favoritism” is normal, natural and essentially universal. We all tend to like best people similar to ourselves. In Freudian terms it is an extension of self-love.

It seems, however, that economists have been reinventing the wheel by demonstrating in-group favoritism yet again. There is a description below. The authors found that bus drivers were less likely to give a free ride to dark-skinned people.

As with all such experiments, however, the problem of generalizability arises. What generalizations, if any, can we extract from the findings? The authors of the study offer a fairly expansive interpretation of their findings but a simpler explanation might be that dark skin is in all the English-speaking countries associated with a high crime rate, so the drivers may have been more likely to suspect dark-skinned requests for a free ride of being dishonest. The principle of parsimony would favor that explanation.

But in reality it is all speculative. NOTHING firm can be concluded from the data. And the authors themselves show how weak generalizations in that field are. They show that what the drivers said they would do and what they actually did were roughly opposite. As LaPiere showed in the 1930s, you cannot infer behavior from expressed behavioral intention. But if you cannot predict behavior even from behavioral intention, what can you predict? Again the answer is nothing.

So these little experiments are fun but are no cause for any heartburn. We are all “racists” to a degree but what implications that has for behavior will vary with both the individual and the situation. Only a Leftist could deny that.

Of course, part of the problem is how racism is defined. To the hysterical Left any mention of race is racism and any mention of racial differences is doubly so. Such reactions are irrational however so the most expansive definition I would support is “preference for one group over another”. And that is the sense in which I have used it above.

Even that usage, however, tends to associate too much with racism. It associates probably harmless attitudes with some of the great evils of history. A more historically-grounded definition would be: “Advocating or practicing harm or disadvantage to other people solely on account of their race”. Racism of that sort is exceedingly rare today outside Muslim countries.

From The Sydney Morning Herald:

Two economists from the University of Queensland, Redzo Mujcic and Professor Paul Frijters, will publish the results of a natural field experiment on Thursday in which trained “testers” of different ethnic appearance got on buses in Brisbane, discovered their travel card wouldn’t work, but then asked the driver to let them to make the trip anyway.

Various testers did this more than 1500 times. Overall, the driver agreed in almost two-thirds of cases.

But whereas the success rate for testers of white appearance was 72 per cent, for testers of black appearance it was just 36 per cent.

Testers of Indian appearance were let on 51 per cent of the time, whereas those of Chinese, Japanese or Malaysian appearance were allowed to travel about as much as Caucasians were.

On average, bus drivers were 6 percentage points more likely to favor someone of the same race. Black drivers tended to be the most generous, accepting in 72 per cent of cases, compared with 54 per cent by Indian drivers and 64 per cent by Asian and white bus drivers.

If you think that’s interesting, try this: to test the importance of how people were clothed, the testers were then dressed in business suits with briefcases. The success rate of whites rose by 21 percentage points and the combined rate for blacks and Indians rose to 75 per cent.

Next, the testers were dressed in military clothes. The success rate of whites rose by 25 percentage points while the combined rate for blacks and Indians rose to 85 per cent.

As a follow-up, the researchers then conducted a random survey of bus drivers at selected resting stations in Brisbane, presenting them with pictures of the same test subjects and asking the bus drivers whether they would let them on or not with an empty travel card.

Some 80 per cent of the bus drivers at resting stations indicated they would give free rides to Indian and black test subjects, even though in reality less than 50 per cent were let on.

Indeed, bus drivers said they would let on white subjects 5 percentage points less often than black subjects, whilst in reality white test subjects were favored at least 40 percentage points more than black testers.

The main reason given for not letting someone on was it was against the rules, while the main reason to let someone on was it was no burden to do so.

It’s all a bit disturbing – if not so surprising – but how do we make sense of it? And what’s it got to do with economics?

Frijters, perhaps Australia’s leading exponent of “behavioural” economics, is developing an economic theory of groups: the different types of groups and how and why they form. All of us feel an affinity with a range of groups. Businesses and government agencies are groups, but there can be groups within those groups; working teams as well as sporting teams. Mixed in with all this are in-groups and out-groups – people we want to associate with and people we don’t.

Often we form groups so as to co-operate in achieving some goal. And groups often involve reciprocation – I do you a favor in the expectation that, when my need arises, you’ll do me one.

So Frijters explains the results of his experiment in terms of group behavior. “People with Indian or black complexions are more likely to be treated as an out-group and less worthy of help compared to Caucasians and Asians,” he says.

“The reason bus drivers were more reluctant to give black and Indian help-seekers a free ride was that they did not personally relate to them.”

When testers were sent to bus stops in military clothes this made them appear to be patriots, defending the same community as the bus driver. So the drivers’ original out-group reaction could be overcome by in-group clothing.

The more favorable treatment of testers in business dress suggests the “aspirational groups” of the bus drivers include people richer than themselves, people with more desirable visual characteristics. That is, people the drivers regard as part of their in-group.

If all this sounds more sociological or to do with social psychology than with economics, it is. But that’s the point of behavioral economics: to incorporate insights from other social sciences into economics.

And what have groups got to do with economics? That’s simple: the objective of many groups is to give their members greater control over economic resources.

Frijter’s new book, An Economic Theory of Greed, Love, Groups and Networks, written with Gigi Foster, will be published this month.

Footnote:

The research described above is still unpublished in its original form so I am not entirely sure what is in it but the authors would appear to be reinventing the work of Hechter as in:

Hechter, M. (1986) Rational choice theory and the study of race and ethnic relations. Ch. 12 in J. Rex & D. Mason (Eds.) “Theories of race and ethnic relations”, Cambridge: U.P.

Hechter, M. (1987) Nationalism as group solidarity. “Ethnic & Racial Studies” 10, 415-426.

Hechter, M., Friedman, D. & Appelbaum, M. (1982) A theory of ethnic collective action. “International Migration Review” 16, 412-434.