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Black defendants are assigned greater bail levels than whites accused of similar offenses. To investigate whether this difference can be explained without taste-based discrimination, we construct a simple model of optimal bail setting. We develop a two-step econometric method that allows us to estimate the model while holding constant defendant heterogeneity that judges can observe, even when we do not. In return for making the behavioral model’s relatively weak parametric assumptions, we are able to allow an arbitrary conditional distribution of such heterogeneity. We estimate the model using publicly available administrative data on felony defendants for five counties in 2000 and 2002. Point estimates suggest discriminatory bail levels in at least one, and possibly two, of these counties, where estimates suggest that judges set bail as if the value of blacks’ lost freedom is less than two-thirds the value of whites’ lost freedom. This result translates into a substantial black-white gap in the value of lost freedom — at least $64 per day.

Testing for Racial Discrimination in Bail Setting Using Nonparametric Estimation of a Parametric Model