Identifying Taste-Based Discrimination: Effect of Black Electoral Victories on Racial Prejudice and Economic Gaps

Abstract

The Obama presidency intensified discussions of how electing a black leader affected white Americans' attitude toward black Americans. I test for its causal impact using black electoral victories in local elections. Using Race Implicit Attitude Test scores as a measure of racial prejudice and close-election regression-discontinuity design for causal inference, I find black electoral victories cause racial bias to rise, by 4% of the average black-white difference. Simultaneously, they cause larger racial gaps in unemployment and mortgage denial. Interpreting these close electoral victories as instrumental variables, I find a large causal effect of prejudice-based racial discrimination on black-white economic gaps.