Judicial Ingroup Bias in the Shadow of Terrorism *

Abstract

We study ingroup bias –the preferential treatment of members of one’s own group – in naturally occurring data, where economically signi…cant allocation decisions are made under a strong non-discriminatory norm. Data come from rulings in Israeli small claims courts during 2000-04, a period characterized by intense ethnically-based terrorism. Our analysis exploits the essentially random assignment of cases to judges –Jewish or Arab –and the exogeneity of terrorist attacks with respect to the legal procedure. Evidence suggests the existence of substantial bias: a claim is around 15% more likely to be accepted if assigned to a judge of the same ethnicity as the plainti¤. Furthermore, we …nd that this bias increases with the intensity of terrorism in the vicinity of the court during the period preceding the ruling. The results are consistent with existing theory and lab evidence according to which salience of group membership enhances social identi…cation.