You are using an older browser version. Please use a supported version for the best MSN experience.

Social discrimination is a possibility even among broadly similar groups

LiveMint logoLiveMint 03-03-2017 Ragini Bhuyan

Much of the debate in ongoing UP elections has been focused on whether the incumbent Samajwadi Party government has shown a caste bias in providing benefits of various welfare programmes.

Recently published research by Hemanshu Kumar and Rohini Somnathan from the Delhi School of Economics shows that affirmative action programmes, especially those involving one-time lump sum grants are vulnerable to biased selection on the basis of caste. The study, which is based on field work in four districts of Bihar, shows that people who had the same caste are chosen as vikas mitra—nodal person between government and potential beneficiaries—and were more likely to receive grants under various welfare programmes. This is despite the fact that all potential beneficiaries belonged to the maha-Dalit category, which includes the most backward among scheduled castes. The authors use their research to underline the salience of individual castes even among broad socio-economic categories such as scheduled castes.

Also Read | Caste Connections and Government Transfers: The Mahadalits of Bihar

Does the sharing economy suffer from racial discrimination? A recent piece in the Harvard Business Review shows that black passengers have been subjected to higher waiting and cancellation rates on ride-hailing platforms. The researchers conducted experiments among 1,256 hosts on Airbnb, an online hospitality service, by sending reservation requests from fictitious accounts. When potential guests did not have any reviews on their profile pages, white guests had a 48% acceptance rate as opposed to a 29% acceptance rate for black guests. However, the acceptance rates were identical when both profiles had at least one positive review. The rates did not differ significantly even when the reviews were manipulated to include more negative reviews. The authors argue that in the absence of information, hosts draw conclusions about the guests based on racial stereotypes, and such platforms can combat discrimination by encouraging reviews and better information sharing.

Also Read | A Better Way to Fight Discrimination in the Sharing Economy

For the first time since 2009, the value of global imports of information and communication technology (ICT) goods registered a decline in 2015 to a level of about $2 trillion, according to data from the United Nations Conference on Trade and Development (UNCTAD). While the 2009 decline was attributed to global financial crisis, the latest drop signifies more of a qualitative change in consumption patterns in this sector. First of all, the fall in ICT goods is much less than the overall drop in global imports. Second, 65% of the drop in import value is for personal computers, laptops, tablets, storage units, parts and accessories. It is communication equipment category such as smart phones which are driving the growth in ICT trade, UNCTAD says. The trend is even more pronounced in developing countries, where for every dollar’s worth of imported computers and peripherals, $1.5 was spent on imported communication equipment.

Also Read | Trade in Information and Communications Technology Goods Fell in 2015

How does GDP growth affect the earnings of workers? The answer may vary depending on gender, class, industry and even size of employer shows a recent National Bureau of Economic Research (NBER) working paper.

Low-wage workers are highly exposed to volatility as they work in pro-cyclical sectors like construction and manufacturing. High-wage workers, on the other hand, are highly exposed because most of their income is in the form of bonuses and stock options. Even within the rich, differences remain. Male financiers in the top 0.1% earnings bracket may receive up to a 5.6% pay raise for every 1% increase in GDP. The earnings of top doctors, on the other hand, see only a 0.25% increase in pay for the same rise in GDP. Men’s wages, in general, are more directly correlated to economic growth.

Also Read | Worker Beats: Five Facts about Systemic Earnings Risk

What is the relation between media, candidates and political campaigns? Camilo García-Jimeno and Pinar Yildirim from the University of Pennsylvania find that the media finds it more worthwhile to report messages by politicians that target core supporters. Such reportage is of interest to both swing voters and core supporters. Candidates, on the other hand, may benefit more from speeches targeted at core voters, as long as this is not widely reported in the media.

The authors study US Senatorial races for the period between 1980 and 2012, and find that Democratic candidates typically see a larger turnout in core voters when they target their speeches towards such voters. However, in doing so, Democratic candidates face a greater risk (greater than Republican candidates) of turning off swing voters (who are usually not driven by ideology).

Also Read | Matching Pennies on The Campaign Trail: An Empirical Study of Senate Elections and Media Coverage

Economics Digest runs weekly, and features interesting reads from the world of economics

More From LiveMint

image beaconimage beaconimage beacon