Chapters 5 and 6 of the Why Axis focus on economic discrimination.
Luckily, overt discrimination and bigotry has been on the decline for a while. However, economic discrimination, discrimination on the basis on economic situation/incentives/opportunities. Economic discrimination includes rejecting a qualified candidate who expresses an interest in starting a family in the future, or charging men 18-24 more for car insurance because they are likelier to get in an accident.
Both economic discrimination and certain kinds of animus, or a hostile feeling when engaging with people of different races, orientations or ability, are obstacles to social justice and socially optimal outcomes. Gneezy and List discuss various forms of discrimination and scenarios, including a disabled man who gets quoted a higher price because the mechanic assumes he can’t seek other options easily, and a black man who only received treatment equal to that of a averagely dressed white person – when dressed in a suit. The increased usage of the Internet and explosion of ecommerce also gives merchants incentives to price discriminate based on the data they gather on consumers (how much they buy, how often they purchase, etc.).
How can we distinguish between economic discrimination and animus? Are they one and the same, or distinct from one another? Well, Gneezy and List claim that if you only discriminate when you have economic incentives to (i.e. can make a profit) you are engaging in economic discrimination (charging a person more for a car because they look like they can afford it), but if you’re literally a bigot you’re discriminating all the time. I just don’t understand how assuming a black man can’t afford/doesn’t want a pricier car and treating him differently is really not racial animus. Seems like a combination to me.
On the contrary, if an individual is maximizing their utility or profit by discriminating based on various factors – is this efficiency? There is sometimes a difference between socially optimal outcomes and efficient outcomes. Is there some forms of economic discrimination that would be accepted? If we threw all decency and fairness out the window – are all forms economic discrimination still irrational and wrong? I have no idea – I guess we’d have to find a economy with active economic discrimination and see if it’s doing well or not.