DP13368 Measuring Ethnic Stratification and its Effect on Trust in Africa

Author(s): Roland Hodler, Sorawoot Srisuma, Alberto Vesperoni, Noemie Zurlinden
Publication Date: December 2018
Date Revised: December 2018
Keyword(s): ethnic diversity, ethnic fractionalization, inequality, Trust
JEL(s): D31, D63, Z13
Programme Areas: Public Economics, Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=13368

We define and axiomatically characterize an index of ethnic stratification that measures the extent to which the hierarchy in socio-economic positions across the individuals of a society follows ethnolinguistic lines. This index generalizes the idea of between-group inequality to situations where data on economic and ethnolinguistic distances between pairs of individuals is available. We define an estimator of our index that takes the form of a second order U-statistic and has well-behaved statistical properties, and we show that ethnic stratification is empirically related to low levels of trust in other people and institutions at the local level in Africa.