Media Briefings

JEWISH DISCRIMINATION AGAINST ARABS: Evidence from the Israeli market for used cars

  • Published Date: November 2013

New research finds robust evidence of discrimination against Arab buyers and sellers in the online market for used cars in Israel. The study by Dr Asaf Zussman, which is published in the November 2013 issue of the Economic Journal, shows that discriminatory behaviour is mainly motivated by lack of trust. Jewish buyers and sellers are more likely to discriminate against Arabs the stronger their agreement with the statement that ‘Arabs are more likely than Jews to cheat’.

The research also finds that is not only Jewish buyers who discriminate against Arab sellers: Arab buyers discriminate against sellers from their own ethnic group, although to a lesser extent than Jewish buyers.

Discrimination against Arab car buyers

To study discrimination against Arab buyers, Dr Zussman chose 8,000 ads posted by Jewish car sellers on a leading website for classified ads. He sent each seller one email from a fictitious buyer with a distinctly Arab first name and another email from a fictitious buyer with a distinctly Jewish first name. To translate the extent of discrimination into monetary terms, buyers’ emails were randomly assigned ‘requested’ discounts.

The results of the first stage of the experiment provide robust evidence that Jewish car sellers discriminate against Arab buyers and that the extent of discrimination varies with monetary incentives: the overall response rate was 22% higher for Jewish buyers; when Arab buyers ‘offered’ the car’s posted price, they obtained the same response rate as Jewish buyers who ‘requested’ a 5-10% discount relative to the posted price.

The second stage of the experiment involved a nominally independent telephone survey that collected socio-demographic information and elicited the attitudes towards Arabs of the Jewish sellers who were contacted in the first stage. The survey results demonstrate that:

· A large share of Jewish car sellers hold intolerant views towards Arabs. For example, almost half of the survey participants agreed with the statement that ‘there should be a law prohibiting marriages between Jews and Arab Israelis’.

· These attitudes are significantly correlated with sellers’ socio-demographic characteristics. For example, secular Jews hold more favourable views of Arabs than religious Jews.

By combining the results of the two stages of the experiment, the study demonstrates that discriminatory behaviour is mainly motivated by lack of trust: Jewish car sellers who strongly disagree with the statement that ‘Arabs are more likely than Jews to cheat’ do not discriminate against Arab buyers while other sellers do.

Discrimination against Arab car sellers

To study discrimination against Arab sellers, Dr Zussman posted close to 400 fictitious ads for used cars in the classified ads website. Half of the ads were randomly assigned an Arab first name and the rest were assigned a Jewish first name. The extent of discrimination was measured by the number of incoming phone calls and by the number of unique phone numbers associated with these calls.

The results indicate that the extent of discrimination against Arab sellers is large: on average, ads posted by Arab sellers were associated with only half as many phone calls and unique phone numbers as ads posted by Jewish sellers.

Dr Zussman then used the telephone numbers collected in the second experiment to contact prospective buyers and solicit their participation in another nominally independent survey. The results provide two indications that discrimination is motivated by lack of trust towards Arabs:

· First, it is not only Jewish buyers who discriminate against Arab sellers: Arab buyers discriminate against sellers from their own ethnic group, although to a lesser extent than Jewish buyers.

· Second, the discrimination exhibited by Jewish buyers is associated with the strength of their belief that Arabs are more likely than Jews to cheat but not with other beliefs.

ENDS

Notes for editors: ‘Ethnic Discrimination: Lessons from the Israeli Online Market for Used Cars’ by Asaf Zussman is published in the November 2013 issue of the Economic Journal.

Asaf Zussman is in the economics department at the Hebrew University of Jerusalem.

For further information: contact Dr Asaf Zussman on +972-2-5883124 (email: azussman@mscc.huji.ac.il); or Romesh Vaitilingam on +44-7768-661095 (email: romesh@vaitilingam.com; Twitter: @econromesh).