Pascaline Dupas

Title: Africa is (not) a country: Experimental evidence of a perception trap for Africa

Abstract: We develop a model of biased belief formation about investment destinations in which two forces interact to generate a persistent perception trap. Geographic ignorance—underestimating distances between countries in a region—inflates perceived shock correlations beyond their true values. When combined with a negativity bias in news processing, whether at the individual or media level, this produces a strictly negative expected drift in perceived country attractiveness even when underlying shocks are symmetric. The trap is most severe in regions where geographic ignorance is greatest, independently of true shock correlations. We test the model's predictions using a combination of survey and laboratory experimental methods, exploiting variation in news valence, country pairs, and an information treatment designed to correct geographic misconceptions. We conjecture the mechanisms we identify are strongest in Sub-Saharan Africa, a large and culturally diverse region that outside observers systematically perceive as more homogeneous than it is.