Structural Analysis of Xenophobia (Revise & Resubmit at the Review of Economics and Statistics)

Abstract

We estimate a signaling game of xenophobic behaviors to understand how individual racial animus and perceived unacceptance of racial animus determine xenophobic behaviors in equilibrium. To identify our model, we design a survey about anti-Chinese xenophobia in the US during the Pandemic. We validate our estimates by comparing our model predictions with the causal estimates obtained from an information Randomized Controlled Trial. We find raising perceived unacceptance is more effective than suppressing racial animus at reducing most xenophobic behaviors. We quantify the effects of a COVID infection on xenophobic behaviors in the short and long run.