Paper short abstract:

This work investigates the scope of ethnic, religious, and class discrimination in Lagos, Nigeria and uses a novel design to investigate the foundations/motivations of this treatment, a necessary step in any attempt to mitigate same.

Paper long abstract:

This paper investigates the determinants of illegal price discrimination in the housing and rice markets in one neighborhood of Lagos, Nigeria. In so doing it is among the first experimental audits of discrimination in Africa, a methodology with great potential to elucidate the shape and scope of discrimination in contexts in which unequal treatment can lead to socially destabilizing conflict. We demonstrate the existence of discrimination on class and ethnic bases, and show evidence suggesting that this discrimination is based in empathy, or felt ties, rather than attempts by sellers to maximize profit. This discrimination is of a much greater frequency and magnitude than that in US housing audit studies, consistent with our hypothesis that discrimination will be greater where legal institutions which censor discrimination are weaker. We also show evidence suggesting that when identities are made more salient discriminatory preferences are stronger. We find no support for a readability hypothesis; sellers are no better at reading ability to pay of coethnics than non-coethnics.