Applying the Equity Lens - I

Excerpts from the World Development Report on Equity and Development (2006) [Link]. I was skimming through the report, and thought it's a good idea to bookmark, primarily for myself, a few of the several references to India. What prompted me to look at the report today was this Hindu article.

Stereotypes influence behavior twice through their impact on individuals' self-confidence, and through their impact on the way individuals expect to be treated. To examine the effect of stereotypes on the ability of individuals to respond to economic incentives, Hoff and Pandey (2004)^* undertook experiments with low and high caste children in rural north India. The caste system in India can be described as a highly stratified social hierarchy in which groups of individuals are invested with different social status and social meaning.

In the first experiment, groups composed of three low caste ("untouchable") and three high caste junior high school students were asked to solve mazes and were paid based on the number of mazes they solved. In one condition, no personal information about the participants was announced. In a second condition, caste was announced with each participant's name and village. In a third condition, participants were segregated by caste and then each participant's name, village, and caste were announced in the six-person group.

When caste was not announced, there was no caste gap in performance. But increasing the salience of caste led to a significant decline in the average performance of the low caste, regardless of whether the payment scheme was piece rate (that is, participants were paid 1 rupee per maze solved) or tournament (that is, the participant who solved the most mazes was paid 6 rupees per maze solved, while the other participants received nothing). When caste was announced, the low-caste children solved 25 percent fewer mazes on average in the piece-rate treatments, compared with the performance of subjects when caste was not announced. When caste was announced and groups were composed of six children drawn from only the low caste (a pattern of segregation that for the low caste implicitly evokes their traditional outcast status), the decline in low-caste performance was even greater. While we cannot be sure from these data what the children were thinking, some combination of loss of self-confidence and expectation of prejudicial treatment likely explains the result.

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(*) Hoff, Karla, and Priyanka Pandey. 2004. "Belief Systems and Durable Inequalities: An Experimental Investigation of Indian Caste." Washington, DC: World Bank Policy Research Working Paper Series 3351.