a5588a0246f86f900c405f01_dr3002c.jpg Dean Rohrer

Identity Economics

, 
A great strength of economics is its ability to examine how decisions are made from the point of view of decision makers. But in most economic analysis, the decision makers’ point of view is quite narrow, for it ignores the key role of people's identities and social norms in shaping motivations.

BERKELEY and DURHAM – A great strength of economics is its ability to examine how decisions are made from the point of view of decision makers. For example, economics can explain in this way why consumers buy what they do. It also offers a perspective on why employees work for some employers and not others, why they work as hard as they do, and, indeed, why they go to work at all.

But in most economic analysis, the decision makers’ point of view is quite narrow. It starts with what people like and don’t like. People may have a taste for oranges or bananas, or a preference for enjoying life today instead of saving for the future. They then decide what to buy or how much to save, given prevailing prices, interest rates, and their own income. Economists have included in such analysis that people interact with others, but they have largely treated such social interactions in amechanical fashion, as if they were commodities.

For example, in the standard economic analysis of workplace gender discrimination, men do not like to associate with women on the job – in the same way that they might prefer apples to oranges. Likewise, the standard economic analysis of racial discrimination is that whites do not want to associate with non-whites, and so demand a premium to buy from or work with non-whites.

We hope you're enjoying Project Syndicate.

To continue reading and receive unfettered access to all content, subscribe now.

Subscribe

or

Unlock additional commentaries for FREE by registering.

Register

Support High-Quality Commentary

For more than 25 years, Project Syndicate has been guided by a simple credo: All people deserve access to a broad range of views by the world's foremost leaders and thinkers on the issues, events, and forces shaping their lives. At a time of unprecedented uncertainty, that mission is more important than ever – and we remain committed to fulfilling it.

But there is no doubt that we, like so many other media organizations nowadays, are under growing strain. If you are in a position to support us, please subscribe now.

As a subscriber, you will enjoy unlimited access to our On Point suite of long reads, book reviews, and insider interviews; Big Picture topical collections; Say More contributor interviews; Opinion Has It podcast features; The Year Ahead magazine, the full PS archive, and much more. You will also directly support our mission of delivering the highest-quality commentary on the world's most pressing issues to as wide an audience as possible.

By helping us to build a truly open world of ideas, every PS subscriber makes a real difference. Thank you.

Subscribe Now

https://prosyn.org/yfv3Naw