An economic analysis of "Acting White"

David Austen-Smith; Roland G. Fryer

doi:10.1162/0033553053970205

An economic analysis of "Acting White"

David Austen-Smith, Roland G. Fryer

Managerial Economics, Decision Sciences and Operations

Research output: Contribution to journal › Article › peer-review

223 Scopus citations

Abstract

This paper formalizes a widely discussed peer effect titled "acting White." "Acting White" is modeled as a two-audience signaling quandary: signals that induce high wages can be signals that induce peer group rejection. Without peer effects, equilibria involve all ability types choosing different levels of education. "Acting White" alters the equilibrium dramatically: the (possibly empty) set of lowest ability individuals and the set of highest ability individuals continue to reveal their type through investments in education; ability types in the middle interval pool on a common education level. Only those in the lower intervals are accepted by the group. The model's predictions fit many stylized facts in the anthropology and sociology literatures regarding social interactions among minority group members.

Original language	English (US)
Pages (from-to)	551-583
Number of pages	33
Journal	Quarterly Journal of Economics
Volume	120
Issue number	2
DOIs	https://doi.org/10.1162/0033553053970205
State	Published - May 2005

Funding

* This paper is the melding of two independent projects: “Peer Pressure and Job Market Signaling” [Austen-Smith 2002] and “The Economics of Acting White” [Fryer 2001]. The formal results of these independent papers were essentially identical; thus, we decided to put them together. We are grateful to Roger Myerson for putting us in touch with one another. We are also grateful to Gary Becker, Phillip Cook, Matthias Dahm, Ronald Ferguson, Edward Glaeser, Caroline Hoxby, Lawrence Katz, Steven Levitt, Gavin Samms, Jesse Shapiro, two anonymous referees, and seminar participants too numerous to mention for comments and suggestions. This paper corrects Austen-Smith and Fryer [2003], and all previous versions, which omitted an equilibrium possibility. Financial support from the John D. and Catherine T. MacArthur Foundation through the Social Interactions and Inequality Network (Austen-Smith) and the National Science Foundation (Fryer: SES-0109196) is gratefully acknowledged. The usual caveat applies.

ASJC Scopus subject areas

Economics and Econometrics

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10.1162/0033553053970205

Cite this

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An economic analysis of "Acting White"

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