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INTRODUCTIONAllport's (1954) famous contact hypothesis, which claims that intergroup contact may result in stereotype destruction and prejudice reduction, is now “one of psychology's most effective strategies for improving intergroup relations” (Dovidio et al., 2003, p. 5). Societies, however, do not fully utilize the potential advantages of intergroup contact because of missed opportunities to interact and persisting segregation (McKeown & Dixon, 2017). Individuals prefer to interact with people who are ethnically or religiously similar to them (Chuah et al., 2014), therefore, minority and majority populations do not easily develop friendships or intimate relationships (Lissitsa & Kushnirovich, 2018). The uncertainty involved in encountering members of another culture, intergroup apprehensions and perceived threats are salient factors in avoiding contact between groups (Paolini et al., 2018). Inequality between the sides of the contact and protracted conflict between them may impair intergroup communication (Thiessen & Darweish, 2018), so it still remains rare, evanescent, and superficial (Taylor & Moghaddam, 1994), especially in conflict areas (Dixon et al., 2005; Wagner & Hewstone, 2012). In such areas, where possibilities for contact are scarce, creating positive intergroup encounters is tough (Dixon et al., 2005).In these contexts, intergroup contact through intercultural service encounters (ISEs) may be an opportunity to communicate and create dialog with other groups. ISE may give enough foundation for people to avoid re‐engaging in conflict (Kusago, 2005). Furthermore, the desire of people living in conflict zones to attain economic benefits may act as a catalyst for moving toward peace and stability (Bray, 2009). Although in recent decades intergroup contact theory has extended to the investigation of visual and various types of indirect contact, ISE in general and especially contact with ethnic service providers have been overlooked in the contact literature (Peng et al., 2020).Simultaneously, marketing literature has reflected a growing interest in ISEs, where customers and providers from various cultures engage with one another (Sharma et al., 2015). This literature emphasizes the need to comprehend the challenges created by gaps in perceptions, aspirations and assessments between service customers and providers due to different cultural backgrounds and ethnicity (Chuapetcharasopon, 2014; Sharma et al., 2015). However, it has focused mainly on customer satisfaction, and has generally overlooked the potential effect of ISE on reducing prejudice.As far as we aware, this is the first study which seeks to extend intergroup contact theory to focus on service encounters as a type of cross‐group contact. Its main purpose is to examine whether ISE between majority customers and minority service providers is associated with more positive attitudes toward the entire minority group, and to explain the effects of qualitative and quantitative characteristics of such encounters, and the role of economic beneficiality derived from ISE. To this end, the study integrates social psychology and marketing theories, focusing on two groups in protracted conflict: Israeli Jewish consumers and Israeli Palestinian service providers.1This study was not pre‐registered; data are available from the corresponding author upon request.Israel's population numbers about 9 million people, comprised of Jewish (75%) and Israeli Palestinian (around 20%) citizens (Lissitsa, Kushnirovich & Aharoni, 2022). The intergroup conflict between Israeli Jews (IJ) and Israeli Palestinians (IPs) began with the establishment of the State Israel in 1948, and has stretched on for decades (Peres & Ben‐Rafael, 2006). This conflict is the deepest and longest‐running schism in Israel, which is difficult to resolve because of deeply ingrained mutual prepossessions. Formally included as citizens, IPs is socially excluded (Schnell & Sofer, 2002; Youngmann & Kushnirovich, 2020) and geographically separated. Separatism is institutionalized by the school system's self‐segregation, which effectively prevents Israeli Jewish and Palestinian students from meeting and interacting (Hoter et al., 2012).The Israeli Palestinian population in Israel is also economically segregated (Kushnirovich & Sherman, 2018). Approximately 80% of the Israeli Palestinian population are rated in the lowest four socio‐economic deciles (Abraham Fund, 2013). The economy of Israeli Palestinian communities is considered peripheral for a number of reasons: it is located on the outskirts of the country; it specializes in older traditional industries; it is highly dependent on local markets; and it is incorporated in the national economy under subordinating conditions (Schnell & Sofer, 2002). IPs is overrepresented in commerce; they work in industries strongly reliant on commodities supplied by companies located in the national core (Heilbrunn & Kushnirovich, 2015). Entrepreneurship is highly valued as a way to achieve economic independence and mobility, and many Israeli Palestinian entrepreneurs have succeeded in breaking down ethnic constraints and gaining access to Jewish markets (Schnell & Sofer, 2002).Encounters between IJ and IP are characterized by substantial power imbalances and asymmetry (Maoz, 2011; Saguy & Kteily, 2014) which are complicated by protracted conflict between the groups (Raz‐Rotem, Desivilya Syna & Maoz, 2020). High‐ and low‐power group members differ in their motivation for and expectations from intergroup contact (Saguy & Kteily, 2014). In work settings, both IJ and IP report feelings of inequality and injustice, with each blaming the other group for the asymmetric power dynamics. This makes Jewish‐Palestinian cooperation very hard to realize (Raz‐Rotem, Desivilya Syna & Maoz, 2020).Recent studies have demonstrated widespread inter‐group hostility, negative attitudes, high social distance, and a high level of blatant prejudice of IJ toward IPs (Lissitsa, 2017; Lissitsa & Kushnirovich, 2018, 2019). Jewish respondents claimed that they would not live next to an Israeli Palestinian (IP) neighbor (51%), or have a Palestinian manager at work (58%), and reported avoiding going through Israeli Palestinian neighborhoods (66%). A large percentage of IPs claims that they would not like to have a Jewish friend (29%) or neighbor (43%) (Abraham Fund, 2013).Intergroup encounters are generally associated with better mutual attitudes of both high‐ and low‐power groups, although they are less successful in enhancing the views of the disadvantaged outgroup as compared to those of the advantaged groups (Tropp & Pettigrew, 2005). According to the Coexistence model which stresses interpersonal collaboration and togetherness, Jewish–Palestinian encounters may foster positive intergroup attitudes, remove prejudices, and promote mutual understanding and tolerance between the groups (Bekerman, 2007; Maoz, 2011). Service encounters, which occur in the context of collaboration and coexistence, and are mainly apolitical in character, allow the participation of those who would ordinarily oppose contact with the other group, such as individuals holding nationalistic or radical political views. In this context, intercultural encounters while receiving services from Israeli Palestinian service providers may play an important role in establishing social relationships between the two groups and social inclusion of the minority group as well as diminishing intergroup anxiety, prejudices, and stereotypes.Given the complicated and multifaceted nature of relationships between the Jewish majority and the Israeli Palestinian minority, research on the relationship between ISE with minority service providers and lower levels of prejudice toward the minority group is suited to the Israeli context. Changing unfavorable attitudes through service encounters may be an essential step in the moderation of protracted conflict. As far as we know, socio‐economic contact in service settings between these two groups has hardly been studied.Intercultural service encountersThe social component of providing services is deemed especially important when high levels of customer‐provider contact occur (Butcher et al., 2003), and when the customer's evaluation of service is based not only on service quality and economic value, but also on how the customer was handled (Bitner et al., 1990). Relational benefits that emerge between service providers and customers from the same cultural background have been well‐examined in marketing research, but literature on the possible consequences of intercultural encounters is relatively scarce.An intercultural service encounter (ISE) is defined as a service exchange procedure in which a customer and a service provider with different cultural backgrounds are engaged (Sharma et al., 2009). Marketing scholars recognize ISE as an inescapable result of globalization, and a pervasive characteristic of an increasingly diversified global marketplace (Demangeot et al., 2015; Tam et al., 2014).Intergroup differences in perception, knowledge level, and personal demographic or psychological characteristics are highly pronounced in ISE, because service customers and providers with different cultural backgrounds may have distinct expectations and views of one another's position and performance (Zhang et al., 2006). Sizoo et al. (2005) argued that when participants do not share cultural values and norms, the service exchange process becomes more complicated, and may lead to misunderstandings and tension. Prior research on ISE provided evidence of culture shock (Stauss & Mang, 1999), perceived discrimination (Barker & Härtel, 2004), and ethnocentrism (Sharma & Wu, 2015) in the customer experience, along with behavioral biases in service provider responses (Martin & Adams, 1999). However, other studies on ISE showed that cultural distance may have a positive effect on interaction comfort and satisfaction (Sharma et al., 2012; Stauss & Mang, 1999). This may be due to customers' low expectations from culturally different service providers, which makes them less demanding and critical (Stauss & Mang, 1999).Due to contradictory claims in the literature as to whether ISE contributes to or harms intergroup relationships, recognition is growing of the necessity to investigate and learn from the challenges posed by differences in how service customers and providers with diverse cultural, ethnic, national and socio‐economic attributes assume, perceive and assess their experiences in ISE (Chuapetcharasopon, 2014; Sharma et al., 2015).Contact theory in economic settingsA wide range of research in various disciplines has investigated what causes intergroup conflict and how to reduce, resolve, and avoid it. Allport's famous contact hypothesis, which was further extended into intercultural contact theory (Brown & Hewstone, 2005; Dixon et al., 2005; Pettigrew & Tropp, 2013a), posits that intergroup contact can lead to the weakening of stereotypes and the lessening of prejudice on an individual and on a group level. Allport's (1954) conditions for beneficial contact effects were equal status of participants, intergroup cooperation and shared aims, and the existence of social norms supporting intergroup contact. In addition to these conditions, Pettigrew & Tropp (2006, 2011) argued that friendships between the groups generally facilitate positive effects of contact.In the case of ISE, we may assume that at least two conditions exist: common goals and intergroup cooperation (the consumer needs a service and the provider is interested in financial rewards). Although social norms in Israeli society are less supportive of social contact with IP, economic contact in ISE fueled by economic worth is more acceptable (Lissitsa & Kushnirovich, 2019); thus, the condition of supportive norms is more relevant for economic contact rather than for social contact.Equal status of participants is a harder condition to fulfill in ISE. The status of minority service providers versus majority customers is typically not equal; they involve power imbalances and asymmetry (Maoz, 2011; Saguy & Kteily, 2014). Members of high‐power and low‐power groups have different expectations from intergroup contact (Saguy & Kteily, 2014), and feel inequality and unfairness during contact (Raz‐Rotem, Desivilya Syna & Maoz, 2020). Even when elements exist that are thought to support effective intergroup contact, such as superior aims, the influence of asymmetric power prevails, posing a barrier to effective interaction (Raz‐Rotem, Desivilya Syna & Maoz, 2020). The condition of cross‐group friendship is also not met. Intercultural encounters between groups in protracted conflict may be perceived by participants as unfriendly and anxiety provoking (Visintin et al., 2017; Pettigrew, 2008). Rosenbaum et al. (2020), in their study of service settings between IJ and IP, found that IJ consumers tend to harbor feelings of discomfort when working with IP service providers.Nevertheless, most empirical studies have noted that Allport's conditions are desirable but not strictly necessary for positive effect, and intergroup contact may reduce prejudice even when not all of these conditions have been met completely (Al Ramiah & Hewstone, 2013; Pettigrew & Tropp, 2013b). A meta‐analysis of literature on intergroup contact by Pettigrew and Tropp (2006) revealed that intergroup contact reduced prejudice in the vast majority of cases: about 94% of the 713 samples showed an inverse relationship between intergroup contact and prejudice, while only 19% of the samples involved encounter situations consistent with Allport's conditions (Pettigrew & Tropp, 2006). In later studies, Pettigrew et al. (2011) explained this by the "mere exposure effect," whereby increased exposure to members of a certain group on its own can dramatically improve attitudes toward this group and decrease prejudice. Mere exposure during contact increases knowledge about the outgroup, reduces anxiety, and arouses empathy (Lytle, 2018). The literature on the mere exposure effect shows that repeated exposure encourages increased liking of the stimulus or agent even when the initial reaction to an agent was adverse (Zajonc, 2001). Thus, even when the power asymmetry between majority and minority populations exists, contact between majority group members and minority ones is associated with more positive attitudes toward the latter (Pettigrew, 1997).One of the comprehensive studies of the effects of self‐reported contact quantity and quality on outgroup prejudice was conducted by Islam & Hewstone (1993). This distinction is extremely relevant for ISE. The frequency with which a person has direct intergroup contacts is referred to as contact quantity. The extent to which intergroup contacts are perceived as positive or negative expresses contact quality (Islam & Hewstone, 1993). Both the quality and quantity of contact significantly predict outgroup prejudice (Dixon et al., 2010) and racial attitudes (Holtman et al., 2005).The mere exposure perspective discussed above suggests that more frequent contact with other groups enhances liking for those groups (Pettigrew & Tropp, 2006). Accordingly, previous studies that found more frequent interaction with an outgroup reported a range of positive effects, including lower levels of perceived threat, prejudice reduction, and lower social distance (Islam & Hewstone, 1993; Lev‐On & Lissitsa, 2015; Lissitsa, 2017; Pettigrew & Tropp, 2013b).Siehl et al. (1992) described service encounters as rites of integration, which may create a momentary feeling of intimacy and closeness between service customers and providers. Social psychology defines closeness as the extent to which people perceive themselves as belonging with others (Tesser A, 1988). Thus, based on the contact hypothesis and marketing approach we may formulate our H1:H1. The frequency of service encounters between IJ customers and IP service providers will be positively associated with attitudes toward the IP.Intergroup contact research has usually emphasized the relevance of interaction quality in improving intergroup relations (Pettigrew & Tropp, 2006). High quality of contact is associated with lower levels of intergroup anxiety and perceived threat (Tausch et al., 2007), and more positive outgroup attitudes (Mähönen et al., 2011). Pleasantness is one of the important dimensions for measuring contact quality (Islam & Hewstone, 1993), and is usually described as whether (or the extent to which) respondents perceived their contact with the outgroup as pleasant or unpleasant (Islam & Hewstone, 1993; Stephan & Stephan, 1985; Van Dick et al., 2004).More pleasant contact experience is associated with more positive attitudes to the outgroup (Bornman, 2016; Plassmann et al., 2008; Tredoux & Finchilescu, 2010), including an ethnic minority outgroup (Desforges et al., 1991). Commonly, a contact is perceived as more pleasant when it is also more equal (Islam & Hewstone, 1993). However, even when members of groups had negative expectations about each other prior to a contact, they gave more positive evaluation to the outgroup when the contact was pleasant than when it was unpleasant (Wilder, 1984). In the most recent study summarizing the literature on contact generalization, Boin et al. (2021) posited that outgroup conflict may weaken the effect of positive contact on outgroup attitudes, but numerous studies found that even in conditions of conflict and power inequalities, positive contact was associated with better attitudes toward an outgroup. Furthermore, marketing literature presents evidence that feelings of comfort and pleasure derived from service are associated with psychological benefits such as customer satisfaction and trust (Sharma et al., 2015), improved confidence and decreased anxiety (Hennig‐Thurau et al., 2002; Rosenbaum et al., 2020). As the literature review demonstrated that quality of contact in terms of pleasantness may improve attitudes toward minorities, we may hypothesize that:H2. The pleasure derived from service encounters between IJ customers and IP service providers will be positively associated with attitudes toward the IP.The interrelations between the quantitative and qualitative characteristics of contact also matter. Frequent intergroup contact can be associated with better perceptions and lower antagonism between groups, making contact more pleasant for both sides (Wagner & Hewstone, 2012; Lissitsa & Kushnirovich, 2019; Pettigrew & Tropp, 2013a). Bernardo et al. (2021) found a positive correlation between frequency of intergroup contact and its quality. Similarly, a positive correlation was also found by Bornman (2016) between cross‐racial contact frequency and contact experience in terms of its pleasantness. Thus, we may hypothesize that:H3. The frequency of service encounters between IJ customers and IP service providers will be positively associated with the pleasure derived from service encounters.Economic beneficiality as an important driver of ISE and improving intergroup relationsPrior studies on ISE considered service outcome in terms of failure versus success (Sharma et al., 2012; Sharma & Wu, 2015; Stauss & Mang, 1999). Such a division is imprecise, since in service encounters the extent of economic worth and beneficiality is of great importance. In service settings, exchange is intrinsically a collaborative action in which two or more actors work together to create a flow of benefits that is superior to what they could achieve alone or in other combinations. In the marketing literature, the economic beneficiality of service encounters for customers is usually described as "perceived value of service," a concept based on the relation between consumer perception of service quality and price. This concept was developed by Zeithaml (1988), and elaborated on by Hellier et al. (2003) as “the customer's overall appraisal of the net worth of the service, based on the customer's assessment of what is received (benefits provided by the service), and what is given (costs or sacrifice in acquiring and utilizing the service)” (Hellier et al., 2003, p. 1765).Service price and quality, and making the service worthwhile for consumers, are often considered as the building blocks of customer satisfaction, loyalty and behavioral intentions (Lai & Chen, 2011). The higher the customers’ evaluation of perceived value of service, the higher their repurchase intentions and loyalty (Grewal et al., 1998; Lai & Chen, 2011), leading to more frequent service encounters between service provider and customer. Thus, perceived value of service reflecting its economic worth for a client is an important driver of service purchasing (Zeithaml, 1988). Correspondingly, it may be expected that:H4. The perceived value of service will be positively associated with frequency of service encounters.Evaluation of the economic costs and benefits of encounters are associated with relationship satisfaction (Cook & Rice, 2003). Customers obtain psychological satisfaction or pleasure from taking advantage of a good deal (Grewal et al., 1998; Lichtenstein et al., 1993). Rosenbaum et al. (2020) found that even when ISE occur between groups in conflict (IP and IJ), high perceived value of services arising from IP service providers' professionalism and recommendations of other customers increased feeling of consumer comfort. Therefore, perceived value of service and feeling pleasure from purchasing a service are positively related to one another (Sharma et al., 2015; Thaler, 1985).Working together for mutual benefit may reduce bias among groups and enhance intergroup relations (Esses et al., 2012). Intergroup relations that include exchanges may be interpreted in the framework of the Social exchange theory (Thibaut and Kelley, 1959). The theory explains how the perceived costs and benefits of interactions relate to individuals’ attitudes toward these interactions and their actors (Cropanzano & Mitchell, 2005). The higher the benefits derived from interactions, the more pleasantly individuals perceive these interactions, and the better are the attitudes to their counterparts. Although Social exchange theory focuses on both economic and non‐economic rewards, its roots are in economic theory, and therefore it may be easily adapted to the business context, especially in tourism (Choi & Murray, 2010; Wang & Pfister, 2008; Ward & Berno, 2011). Multiple studies have shown that those who economically benefited from interactions with international tourists reported better attitudes toward them (Haley et al., 2005; Ward & Berno, 2011). As the literature review demonstrated, perceived value of ISE should be associated with better attitudes toward minorities, so we may hypothesize that:H5. The perceived value of service encounters between IJ customers and IP service providers will be positively associated with the pleasure derived from service encounters.H6. The perceived value of service encounters between IJ customers and IP service providers will be positively associated with attitudes toward IP.The conceptual model of the study is presented in Figure 1.1FIGUREConceptual model of the studyMETHODProcedureThe data were gathered through an on‐line survey. A pre‐test study comprising twenty respondents was conducted through an online survey to clarify whether the questions were clear enough for the interviewees, whether respondents could locate a proper answer for each closed question, and whether the question order produced biases. Afterwards, research assistants posted an invitation and a survey link for potential interviewees on several online Israeli forums and general interest Facebook groups (e.g, politics, culture, family, health, sport, entertainment, consumption, groups of residents from different localities, and so on). To ensure the representativeness of the sample, age and gender quotas were imposed. To further guarantee better representativeness of our sample, after approximately 80% of the pre‐planned sample size was reached, we asked the respondents to share and/or send our survey link to their acquaintances with specific characteristics (age and gender) (for justification of the use of the snowball method for groups that are difficult to reach see Cohen & Arieli, 2011; Heckathorn, 2011). The survey could be completed only once by each interviewee, and anonymity was guaranteed; the response rate was about 70%. To maintain the anonymity promised to interviewees, the database did not include the respondents’ email addresses, telephone numbers, or other identifying details. The questionnaire included questions on frequency, perceived value and pleasure derived from ISE, attitudes toward IP, frequency of face‐to‐face and online social contact with IP, and demographic characteristics. Creation of the questionnaire was preceded by ten pilot interviews.SampleThe sample included 402 IJ. Of them, 57.2% were male, ranging in age from 21 to 65 years, with a mean age of 34.7 years (SD = 12.3). In the sample, 2.2% had less than high‐school education, 14.7% completed high‐school, 11.9% had a vocational studies diploma, 25.1% were students in a Bachelor's degree program, 31.8% held a Bachelor's degree, and 14.2% had at least an academic Master's degree. Mean income was 4.1 (SD = 2.1), on a 7‐point scale (see control variables, below), that is, about 7000 NIS. Most respondents (50.5%) lived in the Tel‐Aviv and Central regions, 18.7% in the Northern region, 25.6% in Jerusalem, Judea and Samaria region, and 5.2% in the Southern region.MeasuresWe regarded the following types of service settings in ISE: encounters with out‐of‐home IP service providers (car repairmen, hairdressers, cosmeticians, seamstresses, and so on); professionals who come to the respondents' home for renovations, repairs, cleaning, and so on; service providers in the tourism, recreation and leisure sectors; providers of food services (restaurants, catering); and professionals in the health and care‐giving sector (physicians, nurses, pharmacists, care‐givers). The related list of service settings including food services, bus transportation, hair salons, pharmacies, and other health care services provided by physicians or surgeons was used by Rosenbaum et al. (2020).Perceived value of ISE reflected benefits received for the monetary price paid. It was a measure constructed from five items formulated as: “To what extent was the acquisition of service from IP worthwhile economically for you?” (Each question related to one of the five above‐mentioned service encounters on a scale from 1 = “not at all” to 5 = “to a very great extent”). The related questions for measuring worthwhile acquisition of services were used by Grewal et al. (1998) & Petrick (2002). The internal reliability value (Cronbach alpha) was 0.87.Frequency of ISE was measured on the basis of five questions: “How often did you participate in service encounters with IP in… (The five above‐mentioned service settings),” on a scale from 1 to 8, where 1 = “not at all” and 8 = “a few times a day”. The internal reliability value was .82.Pleasure derived from ISE was measured on the basis of five questions “To what extent were service encounters with IP pleasant or unpleasant for you?” Each question referred to one of the five above‐mentioned service settings, on a scale from 1 = not pleasant at all to 5 = pleasant to a very great extent. The internal reliability value (Cronbach alpha) was .89.Attitudes toward IP were measured based on the General Evaluation Scale (Wright et al., 1997). The measure contained six items on a scale of 1 to 5, where “1” reflected negative attitudes and “5” showed positive attitudes. The items were formulated as “What do you feel toward IP?” Answers were given in terms of: (a) 1 = distance, 5 = proximity; (b) 1 = suspicion, 5 = trust; (c) 1 = hostility, 5 = friendliness; (d) 1 = contempt, 5 = respect; (e) 1 = disgust, 5 = admiration; and (f) 1 = negative feelings, 5 = positive feelings. Higher scores reflected more positive attitudes. The internal reliability value (Cronbach alpha) was .95.Frequency of online social contact with IP was measured based on one question: “How often are you in contact with IP on social media (Facebook, Instagram, WhatsApp, forums, and newsgroups)?” Responses were on a scale of 1 to 8, where 1 = not at all and 8 = a few times a day.Frequency of face‐to‐face social contact with IP, not during service encounters, was measured based on one question: “How often do you meet with IP in situations unrelated to service settings (studies, public places, and places of entertainment)?,” with answers given on a scale from 1 to 8, where 1 = not at all and 8 = a few times a day.Control variables were gender (0 = Female, and 1 = Male), age in years (continuous variable), education (1 = less than high school, 2 = completed high school, 3 = vocational studies, 4 = studying for a Bachelor's degree, 5 = Bachelor's degree, 6 = Master's degree or higher), monthly income (1 = less than 2000 NIS21 NIS = 3.5 USA $., 2 = 2,000‐3,999 NIS, 3 = 4,000‐5,999 NIS, 4 = 6,000‐7,999 NIS, 5 = 8,000‐9,999 NIS, 6 = 10,000‐15,000 NIS, 7 = more than 15,000 NIS).Descriptions of the variables are presented in Table 1.3We confirm that we have reported all measures, conditions, and how we determined our sample sizes. There were no data exclusions.1TABLEDescription of variablesVariablesFactor loadingsaCronbach alphaMeanSDPerceived value of ISE with IP (Items scaled 1–5):.872.48.96Out‐of‐home service providers.742.521.22Professionals who come to respondents’ home.682.611.32Service providers in the tourism, recreation and leisure sectors.832.371.61Providers of the food services.842.521.18Health and care‐giving service providers.682.401.02Frequency of ISE with IP (Items scaled 1–8):.822.891.19Out‐of‐home service providers.783.001.66Professionals who come to respondents’ home.652.641.54Service providers in the tourism, recreation and leisure sectors.712.491.41Providers of the food services.683.041.66Health and care‐giving service providers.723.261.52Pleasure derived from ISE with IP (Items scaled 1–5):.892.841.02Out‐of‐home service providers.792.711.23Professionals who come to respondents’ home.862.691.23Service providers in the tourism, recreation, and leisure sectors.742.781.25Providers of the food services.883.001.25Health and care‐giving service providers.803.031.20Attitudes toward IP (Items scaled 1–5):.953.571.43Distance–proximity.823.371.73Suspicion–trust.843.331.70Hostility–friendliness.843.801.64Contempt–respect.844.121.59Disgust–admiration.883.311.33Negative feelings–positive feelings.953.481.65Frequency of face‐to‐face social contact with IP, which is not related to service settings (Scaled 1–8)3.232.06Frequency of online social contact with IP (Scaled 1–8)2.151.69Abbreviations: ISE, intergroup service encounters; IPs, Israeli Palestinians.aThe cutoff is .50.RESULTSDescriptive statisticsIJ consumers' perceived value of ISE with IP was almost at mid‐point (M = 2.48, SD = .96 on a scale of 1–5) and differences between different kinds of services were rather small. The pleasure derived from the ISE was just above mid‐point (M = 2.84, SD = 1.02 on a scale of 1–5). Consumers reported the highest pleasure from ISE in health and caregiving (M = 3.03, SD = 1.20), and the lowest from services received in the customer's home (M = 2.69, SD = 1.23).The frequency of ISE of IJ with IP was also relatively low (M = 2.89, SD = 1.19 on a scale of 1–8); that is, about once a month. The most frequent IJ consumers received services from IP service providers in health and caregiving (M = 3.26, SD = 1.52), with the least frequent in tourism, recreation and leisure service settings (M = 2.49, SD = 1.41). All characteristics of contact were positively correlated to one another: r = .678, p <.001 between perceived value and pleasure derived from ISE; r = .379, p <.001 between frequency and pleasure derived from ISE; and r = .430, p <.001 between frequency and perceived value of ISE.Frequency of face‐to‐face social contact with IP not related to service settings (studies, public places, places of entertainment, etc.) was from once a month to once a week (M = 3.23, SD = 2.06 on a scale of 1–8); that is, higher than the frequency of ISE. Nevertheless, only 6.7% of IJ respondents did not meet IP at all in service settings versus 22.6% who did not meet IP in situations unrelated to services. Online social contact with IP was the rarest (M = 2.15, SD = 1.69 on a scale of 1–8), less than once a month; 52.5% did not interact with IP online at all. Thus, intercultural encounters in service settings were more common to IJ than in other fields of life.The attitudes of IJ toward IP were more positive than moderate (M = 3.5, SD = 1.43 on a scale 1–5). The highest grades were reported in respect (M = 4.12, SD = 1.59), and the lowest grades in admiration (M = 3.31, SD = 1.33) and trust (M = 3.33, SD = 1.70).Testing research hypothesesTo justify the validity of the constructs of perceived value of ISE, frequency of ISE, pleasure derived from ISE with IP, and attitudes toward IP, confirmatory factor analysis (CFA) was performed, where these constructs were treated as latent variables. The fit indices of CFA were found acceptable and even good: χ2 = 292.461 (p <.001), root‐mean‐square error of approximation RMSEA = .049, comparative fit index CFI = .977, normed fit index NFI = .955, incremental fit index IFI = .970, and Tucker–Lewis index TLI = .968, providing a high level of confidence in the model. All factor loadings were higher than .657.To examine the effects of ISE on attitudes toward IP, we used a structural equation model (SEM). The model is presented in Figure 24Since attitudes to a group may predict frequency of contact and perceptions of its pleasantness and worth, to examine whether the reversed model was equally plausible we ran an alternative model, in which attitudes toward IP were the independent variable predicting perceived frequency of ISE with IP, pleasure derived from ISE, and perceived value of ISE. The Chi‐square of the reversed model was also significant (χ2 = 490.156, p <.001), but other fit indices and the explanatory power of this model (RMSEA = .048, CFI = .966, NFI = .914, IFI = .947, TLI = .927, and standardized root mean squared residual SRMR = .054) were worse than those of the original model reported in Figure 2. To compare SEMs that are not nested within one another, as recommended by Browne & Cudeck (1993), three information indices were examined: Akaike information criterion AIC, Bayesian information criterion BIC and expected cross‐validation index ECVI. Smaller values indicate a better fit, and a difference in BIC of more than 10 points means a significant difference between non‐nested models (Raftery, 1995). For the original model, all these indices had smaller values than those of the alternative model with the opposite directions (AIC = 697.116 vs. 870.165, BIC = 1180.686 vs. 1353.736, ECVI = 1.738 vs. 2.170, respectively). The difference in BIC was 173.05, which is more than 10 points. Together, all of these indicate that the model reported in Figure 2 fit the data better than the alternative model with the opposite directions.. The model also controlled for gender, age, education, and income. Since frequencies of face‐to‐face and online social contact with the outgroup may be important predictors of attitudes, these independent variables were also included. The fit indices of SEM were good: χ2 = 455.116 (p <.001), RMSEA = .044, CFI = .971, NFI = .937, IFI = .972, TLI = .961, indicating a high level of confidence in the model. The information indices were AIC = 697.116, BIC = 1180.686, and ECVI = 1.738.2FIGURESEM for standardized effects of service encounters (ISE) on attitudes toward Israeli Palestinians (IPs)Note: Direct effect of perceived value of ISE on attitudes toward IP: β = .039 (p =.555). Indirect effect of perceived value of ISE on attitudes toward IP through frequency of ISE: β = ‐.084 (Lower bounds = ‐.144, Upper bounds = ‐.035, p < .001). Indirect effect of perceived value of ISE on attitudes toward IP through pleasure derived from ISE: β = .294 (Lower bounds = .198, Upper bounds = .390, p < .001). Total effect of perceived value of ISE on attitudes toward IP: β = .249 (p < .001). *p < .05, **p < .01, ***p < .001The study revealed that both quantity and quality of contact in terms of ISE were significantly associated with attitudes toward IP. The qualitative characteristic of contact, that is, pleasure derived from ISE with IP, was positively associated with attitudes toward IP (β = .423, p <.001). Thus, hypothesis H2 was supported. The relationship between the quantitative characteristic of contact frequency of ISE and attitudes toward IP was significant and negative (β = ‐.208, p <.001). Thus, hypothesis H1 that frequency of service encounters with IP service providers would be positively associated with attitudes of IJ customers toward the IP was not supported. Apparently, when customers and service providers belong to two groups involved in deep conflict, customers feel stress, anxiety, and unease during social interaction, which is an integral part of purchasing a service. This may explain the deterioration of attitudes toward IP. The relationship between quantitative and qualitative characteristics, frequency of ISE and pleasure derived from them, was non‐significant (β = .092, p =.169). Thus, hypothesis H3 was not supported.Perceived value of ISE was positively associated with frequency of ISE (β = .403, p <.001), that is, the more worthwhile the service was perceived by IJ customers, the more often they purchased/repurchased this service from IP. Thus, hypothesis H4 was supported. The study also found a strong positive relationship between perceived value of ISE and pleasure derived from ISE (β = .696, p <.001), thus supporting hypothesis H5. Customers, whose appraisal of the value of service purchased from IP was high, felt pleasure during the purchasing transaction.The direct effect of perceived value of ISE on attitudes toward IP was non‐significant (β = .039, p =.555), but this may be due to the mediation of frequency of ISE and pleasure derived from ISE. To investigate this, indirect effects and total effect of perceived value of ISE on attitudes toward IP were examined.The indirect effect of perceived value of ISE on attitudes toward IP through pleasure derived from ISE was significant: β = .294 (Lower bounds = .198, Upper bounds = .390, p <.001). Thus, pleasure derived from ISE mediated the relationship between perceived value of ISE with IP and attitudes toward IP. The higher an IJ consumer evaluated the economic worth of ISE with IP, the more pleasure s/he derived from getting a “good deal,” and, in turn, the higher pleasantness was associated with better attitudes toward the IP ethnic group.The effect of perceived value of ISE on frequency of ISE was positive, but the effect of frequency of ISE on attitudes toward IP was negative, so that the indirect effect of perceived value of ISE on attitudes toward IP through frequency of ISE was significant and negative: β = ‐.084 (Lower bounds = ‐.144, Upper bounds = ‐.035, p <.001). The more worthwhile ISE was perceived by IJ customers, the more often they purchased the services from IP. However, more frequent contact with service providers who belong to an ethnic group perceived as hostile and antagonistic may annoy and provoke anxiety. Thus, frequency of ISE was also a mediator of the relationship between perceived value of ISE and attitudes toward IP.The total effect of perceived value of ISE on attitudes toward IP was positive and significant (β = .249, p <.001). Thus, hypothesis H6 was supported. Since after mediation the direct effect of perceived value of ISE on attitudes toward IP was non‐significant (β = .039, p =.555), we may conclude that full mediation occurred.Age and frequency of online social contact were positively related to attitudes toward IP (β = .110, p =.028; β = .377, p <.001, respectively). No significant effects of gender, education, income, and frequency of face‐to‐face social contact on attitudes toward IP were found.DISCUSSIONThis research integrates social psychology and marketing theories, focusing on service encounters between ethnic minority service providers and majority consumers in the context of groups that possess social and cultural incompatibilities. This study contributes to the extensive literature on Allport's contact hypothesis, which focuses on social contact, extending it to the field of economic contact. It contributes to the literature explaining whether economic contact in service settings may improve attitudes toward minorities as social contact does. The study distinguishes between quantitative and qualitative characteristics of ISEs, and formulates an additional characteristic of intergroup contact in economic settings–its economic beneficiality (perceived value), stressing its role with regard to attitudes toward the ethnic minority to which the service providers belong.During economic contact, economic worth is accompanied by a strong social component, which is especially pronounced in service settings. As stressed in the marketing literature, trust as well as social and cultural commonalities are very important for service settings, whereas ISE between two dissimilar groups in prolonged conflict may evoke feelings of anxiety, discomfort, extreme duress or even panic (Rosenbaum et al., 2020). According to Allport's (1954) contact hypothesis, intergroup contact may destroy stereotypes when shared aims and intergroup cooperation exist. In economic contact, such shared aims and cooperation may be expressed in terms of beneficiality for both consumer and service provider (the consumer needs the service and the provider is interested in financial rewards).This study revealed that IJ and IP have infrequent social and economic contact. It should be noted that intercultural encounters in service settings were more common than contact in other fields of life. Perceived value of services and pleasure derived from ISE were slightly less than moderate. Attitudes toward IP were only slightly better than moderate, with especially low grades in admiration and proximity and relatively high value in respect.Most studies developing the contact hypothesis focused on its quantitative characteristics in terms of contact frequency (Pettigrew & Tropp, 2013b). This study showed that frequency of economic contact in and of itself does not improve attitudes toward outgroups in protracted conflict. In fact, we found that frequency of ISE was negatively related to such attitudes. Thus, frequent contact in service settings between groups with incompatibilities, fuelled by historical and political conflict, is associated with worse attitudes toward the minority group. This may be related to prejudice, anxiety, contempt and anger, which may accompany contact between such groups.According to the contact hypothesis, it is not contact per se, but positive contact that may improve relationships between groups. In line with this hypothesis, we found that pleasure derived from ISE was positively associated with attitudes toward IP. This may be explained by the fact that pleasure evokes a sense of closeness between customers and service providers, making the contact between groups “positive,” and thereby creating conditions for improving attitudes toward the outgroup. Thus, only the qualitative characteristic of ISE may explain better attitudes toward minorities, whereas the quantitative characteristic (frequency of ISE) is not associated with improved attitudes. Bornman (2016) and Tredoux and Finchilescu (2010) obtained similar findings for social contact, whereas this study found it for economic contact in terms of ISE. Moreover, frequent ISE between groups in protracted conflict may even be associated with worse attitudes and anxiety (Boin et al., 2021; Dijker, 1987). In other words, in economic settings, the pleasantness of the contact is the threshold condition for contact that works.This study also found the positive total effect of an additional characteristic of economic contact, perceived value of ISE, on attitudes toward IP. However, the mechanism of the relationships between perceived value of services and attitudes toward the outgroup was more complicated; this relationship was fully mediated by frequency of ISE and pleasure derived from ISE. On the one hand, the higher the customers' evaluation of the perceived value of service, the more pleasant ISE was for them. Customers derived pleasure from the economic worth of the ISE, and from taking advantage of a good deal, and this pleasure, in turn, was positively related to attitudes toward the outgroup. On the other hand, high perceived value of services was associated with higher frequency of ISE, which may be interpreted as repurchasing behavior. As mentioned above, more frequent ISE between IJ and IP (i.e, the groups in protracted conflict) was negatively related to attitudes toward IP. Overall, the positive indirect effect of pleasure derived from “making a good deal” overlapped the negative indirect effect of frequent contact with a group initially perceived as “antagonistic,” so that the total effect of ISE of IJ with IP on attitudes toward IP was significant and positive.Thus, economic beneficiality, which is a very important component of ISE, may contribute to improving relationships between groups in deep conflict. This phenomenon may be explained by Social Exchange Theory, according to which satisfaction from an interaction is a function of how people perceive the relative costs and benefits of relationships, and serves as an important factor determining attitudes toward minorities (Esses et al., 2012).CONCLUSIONSumming up, when economic contact in terms of ISE is beneficial and worthwhile, it is perceived by customers as more “positive.” This pleasure, in turn, is positively related to attitudes toward the outgroup. Thus, high beneficiality of service encounters between majority clients and ethnic minority service providers is associated with better attitudes toward this minority. Participation in ISE for mutual benefit may reduce bias among conflicting groups. Since economic contact in service settings is more frequent and powerful than social contact, which was found to be non‐significant, ISE may be recognized as an important domain for diminishing discrimination and prejudice, and improving relationships between groups in conflict. These findings are generalizable to other minority‐majority contexts, whether conflict is or is not involved.Limitations and further researchThis research has some limitations. Because we used cross‐sectional data, we were unable to draw causal inferences about the nature of the associations. The interpretation of the findings may be difficult given the multicollinearity of the data. Another limitation is that our sample, a snowball sample, was not representative of the Israeli population. The study focused on IJ consumers and IP providers, but did not consider the opposite situation where IJ provide services to IP. Since the survey was administered only among the majority population, the study only reports the perspective of the majority in the encounter, and misses the minority group's perspective. The effects of contact may be different in these two cases (sometimes strikingly so). Moreover, the power imbalance and asymmetry between IJ and IP in service encounters may buffer an effective interaction. Further studies are needed in this area.This study considered only two qualitative characteristics of ISE, pleasantness and perceived value. Further studies should include other qualitative characteristics. Future studies should also focus on ISE between other majority and minority groups, which are not necessarily in prolonged conflict.CONFLICT OF INTERESTThere is no conflict of interest.REFERENCESAbraham Fund (2013) Information booklet on Arab society in Israel. https://abrahaminitiatives.org/Al Ramiah, A. & Hewstone, M. 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Analyses of Social Issues & Public Policy – Wiley
Published: Aug 1, 2022
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