Asaf Zussman

Ethnic Discrimination: Lessons from the Israeli Online Market for Used Cars

Using a combination of randomised field experiments, follow‐up telephone surveys and other data collection efforts, this article studies the extent and the sources of ethnic discrimination in the Israeli online market for used cars. We find robust evidence of discrimination against Arab buyers and sellers which, the analysis suggests, is motivated by ‘statistical’ rather than ‘taste’ considerations. We additionally find that Arab sellers manipulate their ethnic identity in the market by leaving the name field in their advertisements blank.

Does Terrorism Demoralize? Evidence from Israel

Terrorism is a form of warfare that is specifically designed to have far‐reaching psychological effects beyond the immediate victims. We study the effect of terrorism on the happiness of Israelis during a recent period of severe violence with the Palestinians (the second Intifada). The identification strategy is based on variation in the intensity of terrorism over time and location. Using individual level happiness equations augmented with daily fatality figures, we show that terrorism had practically no immediate or delayed effect on the happiness of Jewish Israelis, but adversely affected the happiness of Arab citizens of Israel.

Ethnic conflict and job separations

We study the effect of the second Intifada, a violent conflict between Israel and its Palestinian neighbors which erupted in September 2000, and the ensuing riots of Arab citizens of Israel, on labor market outcomes of Arabs relative to those of Jewish Israelis. The analysis relies on a large matched employer-employee dataset, focusing on firms that in the pre-Intifada period hired both Arabs and Jews. Our analysis demonstrates that until September 2000 Arab workers had a lower rate of job separation than their Jewish peers and that this differential was significantly reduced after the outbreak of the Intifada. We argue that the most likely explanation for this pattern is increased anti-Arab discrimination among Jews.

Putting Grades in Context

Concerns over grade inflation and disparities in grading practices have led institutions of higher education in the United States to adopt various grading reforms. An element common to several reforms is providing information on the distribution of grades in different courses. The main aims of such “grades in context” policies are to make grades more informative to transcript readers and to curb grade inflation. We provide a simple model to demonstrate that such policies can have complex effects on patterns of student course enrollment. These effects may lower the informativeness of some transcripts, increase the average grade, and lower welfare.

Quest for Knowledge and Pursuit of Grades: Information, Course Selection, and Grade Inflation

This paper exploits a unique natural experiment — Cornell University’s 1996 decision to publish course median grades online to examine the effect of grade information on course selection and grade inflation. We model students’ course selection as dependent on their tastes, abilities, and expected grades. The model yields three testable hypotheses: (1) students will tend to be drawn to leniently graded courses once exposed to grade information; (2) the most talented students will be less drawn to leniently graded courses than their peers; (3) the change in students’ behavior will contribute to grade inflation. Examining a large dataset that covers the period 1990-2004 our study provides evidence consistent with these predictions.

Customer Discrimination: Evidence from Israel

This paper studies customer discrimination against Arab workers in the Israeli market for labor-intensive services. Relying on surveys, field data, and a natural experiment, we provide evidence consistent with Becker’s customer discrimination model. First, a significant share of Jewish customers prefer to receive labor-intensive services from firms employing Jewish rather than Arab workers; these preferences are most strongly linked to concerns for personal safety. Second, customer preferences affect firms’ hiring decisions. Third, firms employing Arab workers charge significantly lower service prices than those employing only Jewish workers.