Risk Aversion and Implicit Bias

Abstract

This paper studies risk aversion as an influential construct in implicit bias testing, and one that has been previously overlooked in the literature. In it, I adapt a model of internal validity and apply it to the impact that risk preferences have on implicit bias. I then implement a laboratory experiment to gauge implicit bias as measured by the implicit association test (IAT). I structurally estimate subjects’ attitudes towards risk. In testing said model, I find that higher levels of risk aversion are associated with stronger implicit bias scores. This result is robust to a variety of econometric specifications and thus lends support to previous critiques of IAT validity.