Ethnicity and risk: a field test of the white-male effect

ABSTRACT

In this article, I analyse the different risk-taking tendencies of students comprising the two major ethnic groups in Israel, Ashkenazi and Mizrahi Jews, in a field setting. I determine ethnicity by students’ last names, and I measure risk by students’ propensity to give up a passing grade on a final exam in order to be able to retake the exam in pursuit of a higher grade, but with the risk of earning a lower grade and possibly not passing the course. Differences in preferences for risk may be part of the explanation for differential labour market outcomes between gender and ethnic groups. I find evidence that Ashkenazi men take more exam risk than both Ashkenazi and Mizrahi women, and Mizrahi men. This finding is consistent with the ‘White-Male Effect’, the notion that white males, or males from the dominant socio-economic group, perceive lower risks than females and non-whites.

KEYWORDS:

• Risk attitudes
• ethic and gender differences

JEL CLASSIFICATION:

• D81
• J15
• J16

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

¹ The results are qualitatively the same if a probit or logit is used.