The Effects of Racial Profiling, Taste-based Discrimination, and Enforcer Liability on Crime

Abstract: The literature contains ambiguous findings as to whether statistical discrimination, e.g. in the form of racial profiling, causes a reduction in deterrence. These analyses, however, assume that enforcers' incentives are exogenously fixed. This article demonstrates that when the costs and benefits faced by officers in enforcing the law are endogenously determined, statistical discrimination as well as taste-based discrimination lead to an increase in criminal activity. Moreover, the negative effects of statistical discrimination on deterrence are more persistent than similar effects due to taste-based discrimination. This suggests, contrary to the impression created by the existing literature, that statistical discrimination is not only harmful, but, may be even more detrimental than taste-based discrimination. Thus, for purposes of maximizing deterrence, the recent focus in empirical research on identifying taste-based discrimination as opposed to statistical discrimination may be misplaced. A superior approach may be to identify whether any type of racial discrimination takes place in the enforcement of laws, and to provide enforcers with incentives to minimize the impact of their discriminatory behavior.