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Ethnic Discrimination on an Online Marketplace of Vacation Rental

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  • Morgane Laouenan

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po)

  • Roland Rathelot

    (University of Warwick [Coventry], CEPR - Center for Economic Policy Research)

Abstract

We use data from an online marketplace of vacation rentals (Airbnb) collected in 19 major cities in North America and Europe to measure discrimination against ethnicminority hosts. This market has three interesting features: the existence of a detailed reviewing system, the high frequency of transactions and the panel dimension of the data. Using the fact that ratings provide potential guests with information about the quality of a listing, we build a credible measure of statistical discrimination, following a strategy a la Altonji and Pierret (2001). Hosts from a minority ethnic group charge 16% less than other hosts in the same cities. Controlling for a rich set of characteristics reduces the ethnic price gap to 3.2%. An additional review increases the daily price more for minority than for majority hosts. Estimating the parameters of a theoretical pricing model, we find that statistical discrimination accounts for most of the price differential: 2.5 percentage points.

Suggested Citation

  • Morgane Laouenan & Roland Rathelot, 2017. "Ethnic Discrimination on an Online Marketplace of Vacation Rental," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01514713, HAL.
    • Handle: RePEc:hal:cesptp:hal-01514713
    Note: View the original document on HAL open archive server: https://hal.science/hal-01514713
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    References listed on IDEAS

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    Cited by:

    1. Lepage, Louis Pierre, 2021. "Endogenous learning, persistent employer biases, and discrimination," CLEF Working Paper Series 34, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    2. Jean-Benoît Eyméoud & Paul Vertier, 2023. "Gender biases: evidence from a natural experiment in French local elections," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 38(113), pages 3-56.
    3. Kevin Lang & Ariella Kahn-Lang Spitzer, 2020. "Race Discrimination: An Economic Perspective," Journal of Economic Perspectives, American Economic Association, vol. 34(2), pages 68-89, Spring.
    4. repec:hal:spmain:info:hdl:2441/3f39ik5s3j8qapmbpohu7nct0i is not listed on IDEAS
    5. David Neumark, 2018. "Experimental Research on Labor Market Discrimination," Journal of Economic Literature, American Economic Association, vol. 56(3), pages 799-866, September.
    6. Jean-Benoît Eymeoud & Paul Vertier, 2018. "Gender Biases: Evidence from a Natural Experiment in French Local Elections," Post-Print hal-03393139, HAL.
    7. Jean-Benoît Eymeoud & Paul Vertier, 2018. "Gender Biases: Evidence from a Natural Experiment in French Local Elections," Post-Print hal-03393139, HAL.
    8. Herrera, Helios & Glazer, Jacob & Perry, Motty, 2018. "Fake Persuasion," CEPR Discussion Papers 13244, C.E.P.R. Discussion Papers.
    9. Jean-Benoît Eyméoud, 2018. "Housing and discrimination in economics : an empirical approach using Big Data and natural experiments [Logement et discrimination en économie : une approche empirique mêlant expérience naturelle e," SciencePo Working papers Main tel-03419360, HAL.
    10. repec:hal:spmain:info:hdl:2441/3k0m7r593p8gs9njjtpupmlknu is not listed on IDEAS
    11. repec:spo:wpmain:info:hdl:2441/3f39ik5s3j8qapmbpohu7nct0i is not listed on IDEAS
    12. Lepage, Louis Pierre, 2020. "Endogenous learning and the persistence of employer biases in the labor market," CLEF Working Paper Series 24, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    13. Jean-Benoît Eyméoud, 2018. "Housing and discrimination in economics : an empirical approach using Big Data and natural experiments [Logement et discrimination en économie : une approche empirique mêlant expérience naturelle e," SciencePo Working papers tel-03419360, HAL.

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    More about this item

    Keywords

    ethnic discrimination; statistical discrimination; rental market;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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