Discrimination and Economic Expectations

This paper examines whether perceptions of discrimination affect the economic expectations of U.S. households. We focus on two forms of expectations that play a central role in economic and financial decisions of households: labor income and inflation. Using experimental data, we demonstrate that discrimination generates greater dispersion in household forecasts. It increases subjective expectations of income uncertainty by 8% and inflation uncertainty by 5%. The impact of discrimination is concentrated among racial/ethnic minorities, inducing 12%–16% greater variation in their income uncertainty expectations and 10%–12% greater variation in their inflation uncertainty expectations. Both psychological and emotional factors appear to influence the discrimination–economic expectations relation. This paper was accepted by David Sraer, finance. Supplemental Material: The online appendix and data are available at https://doi.org/10.1287/mnsc.2022.02276 .

• 저널Management Science · 70(6) · 4115–4131
• 토픽Financial Literacy, Pension, Retirement Analysis · Accounting
• DOI10.1287/mnsc.2022.02276
• 저자William Bazley, Yosef Bonaparte, George M. Korniotis, Alok Kumar