Ethnic divisions have been shown to adversely affect economic performance and political stability, especially in Africa (Easterly and Levine 1997, Cederman et al. 2007 and 2011). The underlying mechanisms that have played a particularly central role in theory, and that are at the root of conventional wisdom about why ethnicity matters, are that individuals exhibit greater altruism towards co-ethnics, co-ethnic favouritism, or antipathy towards others (Vigdor 2002).

We study the degree of co-ethnic bias in preferences in Nairobi, Kenya – a setting with well-documented and politically salient ethnic divisions – utilising lab experiments to isolate the role of ethnic preferences from other…