The Impact of Consumer-Side Discrimination on Firm Productivity in East Africa

This project uses a field experiment in Kenya to understand the effect of consumer-side discrimination on individual and aggregate-worker productivities.

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Much of the work in the social and technical sciences assumes that technological development coupled with more open trade, freer communication, and, more generally, greater transparency should alleviate discrimination. However, this belief need not be true if discrimination originates from consumers, rather than employers or co-workers. Some of these markers of progress may in fact increase discrimination. This project returns to the open question of the existence/extent of consumer-based discrimination, asking what role consumers play in gender based discrimination in labour markets and workplaces in the developing world.

The field experiment employed evaluate the extent to which consumer-side gender discrimination affects online chat agents’ productivity, thereby impacting firm growth. Each day, the team will randomly assign a male, female, or gender-ambiguous name (and/or image) to each sales agent’s customer-side chat box identity. This randomization will allow the team to isolate the causal effect of consumer discrimination on worker productivity through sales, customer reviews, the tone of the conversation, and time spent in the interaction.

While estimating the degree of consumer-based discrimination in labour markets is important in its own right, it is especially key in low- and lower-middle income countries, where predominantly export-oriented customer-service and IT jobs are on the rise. These trends, coupled with the increased ease of communication brought about by a number of new technologies, suggest that many people in the developing world will have jobs in the future with client-facing roles - if they do not already. Increasing the number of client-facing jobs in the presence of consumer-side discrimination, without intervention, may very well exacerbate already existing gender- and ethnically-based disparities.