Work detail

Income Shocks and Ethnic Group Bias

Author: Mgr. Jiří Hruban
Year: 2019 - summer
Leaders: doc. PhDr. Michal Bauer Ph.D.
Work type: Financial Markets
Language: English
Pages: 74
Awards and prizes:
Abstract: The thesis explores how individual income shocks impact ethnic group bias using a survey
dataset from Uganda and meteorological data. Previous research has shown that the
majority of civil conflicts break down along ethnic lines, and that ethnic tribalism harms
economic performance of countries. A better understanding of the causal mechanism
behind ethnic bias could help alleviate both of those problems. The author finds that income
shocks have no measurable effect on ethnic out-group bias, but they might influence ethnic
in-group bias. Since the regression of ethnic bias variables on income proxies likely suffers
from endogeneity, the author employs the copula endogeneity correction model, which,
however, does not prove to perform well with a binary dependent variable. In addition, the
author demonstrates that ethnic group bias is most likely not directly influenced by
variations in rainfall and that instrumenting for income with rainfall variation leads to nonrobust results with even a small violations of model assumptions.




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