Abstract
Measuring discrimination is crucial to key questions in political economy, but studies of how group members discriminate against outsiders have focused on instances where membership is sharply defined. To study common and important instances of fuzzy group membership, I propose two approaches: one based on notions of distance, and the other based on measuring subjective perceptions of group membership. Taking regions in Mexico as an example, I use survey, field experiment and administrative data to test for regional bias in donations, in short-term migration, and in long-term migration. The bias appears only if region membership is conceptualized as fuzzy. Subjective perceptions provide the most consistent regionalization for capturing regional bias, and allow for testing several mechanisms. First, national appeals and a stronger attachment to the nation diminish regional bias. Second, the way individuals draw regions exacerbates regional inequality. The novel approaches can be applied to other identities with fuzzy demarcations.