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The Impact of Qualitative Reviews on Racial Statistical Discrimination: Evidence from Airbnb

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  • Morris, J.

Abstract

This paper analyses the effect of qualitative reviews on racial statistical discrimination. Using a fine-tuned Bidirectional Encoder Representations from Transformers (BERT) language model that was developed specifically for this task, I include the effects of recent qualitative reviews on the log listing price difference between Black and White hosts on Airbnb. For properties without guest reviews, I find a 4% log listing price difference between Black and White hosts for comparable properties. Once review information becomes available, this pricing difference reduces to 1%, providing evidence against the persistence of racial listing price differences on Airbnb, and furthermore, suggesting that race is used as the primary signal of property quality only in the absence of better information. Beyond its applications within the context of Airbnb, this paper aims to explain how the early provision of detailed qualitative information can reduce the effects of statistical discrimination against minorities.

Suggested Citation

  • Morris, J., 2023. "The Impact of Qualitative Reviews on Racial Statistical Discrimination: Evidence from Airbnb," Cambridge Working Papers in Economics 2331, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:2331
    Note: jm2377
    as

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    File URL: https://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe2331.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Airbnb; Discrimination; Race; Online marketplace;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services

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