Interpersonal relations are shaped by the judgements associated with the social cate- gories that individuals perceive in their social contacts. I develop a model of how those judgments form based on a theory of symbolic values. The model depicts the interac- tion between two values, one associated with an inherited ethnic trait ("nationality") and one with an endogenous achievement trait ("income"). Individuals with lower cognitive ability are predicted to invest more value on nationalism and to have hostile relations with immigrants. Multiple equilibria are possible and better schooling may eliminate equilibria with xenophobia. Econometric ndings based on data from three large surveys corroborate the predictions derived from the theoretical model.
