IDEAS home Printed from https://ideas.repec.org/p/hal/cesptp/hal-03930675.html
   My bibliography  Save this paper

Can Information Reduce Ethnic Discrimination? Evidence from Airbnb

Author

Listed:
  • Morgane Laouénan

    (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

    (ENSAE - Ecole Nationale de la Statistique et de l'Analyse Economique - Ecole Nationale de la Statistique et de l'Analyse Economique, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique)

Abstract

We use data from Airbnb to identify the mechanisms underlying discrimination against ethnic minority hosts. Within the same neighborhood, hosts from minority groups charge 3.2 percent less for comparable listings. Since ratings provide guests with increasingly rich information about a listing's quality, we can measure the contribution of statistical discrimination, building upon Altonji and Pierret (2001). We find that statistical discrimination can account for the whole ethnic price gap: ethnic gaps would disappear if all unobservables were revealed. Also, three-quarters (2.5 points) of the initial ethnic gap can be attributed to inaccurate beliefs of potential guests about hosts' average group quality.

Suggested Citation

  • Morgane Laouénan & Roland Rathelot, 2022. "Can Information Reduce Ethnic Discrimination? Evidence from Airbnb," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03930675, HAL.
    • Handle: RePEc:hal:cesptp:hal-03930675
    DOI: 10.1257/app.20190188
    Note: View the original document on HAL open archive server: https://hal.science/hal-03930675v1
    as

    Download full text from publisher

    File URL: https://hal.science/hal-03930675v1/document
    Download Restriction: no
    File URL: https://libkey.io/10.1257/app.20190188?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 151-184, February.
    2. Levitt, Steven D, 2004. "Testing Theories of Discrimination: Evidence from Weakest Link," Journal of Law and Economics, University of Chicago Press, vol. 47(2), pages 431-452, October.
    3. Kerwin Kofi Charles & Jonathan Guryan, 2011. "Studying Discrimination: Fundamental Challenges and Recent Progress," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 479-511, September.
    4. Asaf Zussman, 2013. "Ethnic Discrimination: Lessons from the Israeli Online Market for Used Cars," Economic Journal, Royal Economic Society, vol. 123(11), pages 433-468, November.
    5. Henry S. Farber & Robert Gibbons, 1996. "Learning and Wage Dynamics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(4), pages 1007-1047.
    6. Michael Ewens & Bryan Tomlin & Liang Choon Wang, 2014. "Statistical Discrimination or Prejudice? A Large Sample Field Experiment," The Review of Economics and Statistics, MIT Press, vol. 96(1), pages 119-134, March.
    7. Kevin Lang & Jee-Yeon K. Lehmann, 2012. "Racial Discrimination in the Labor Market: Theory and Empirics," Journal of Economic Literature, American Economic Association, vol. 50(4), pages 959-1006, December.
    8. James J. Heckman, 1998. "Detecting Discrimination," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 101-116, Spring.
    9. John A. List, 2004. "The Nature and Extent of Discrimination in the Marketplace: Evidence from the Field," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 49-89.
    10. Yona Rubinstein & Dror Brenner, 2014. "Pride and Prejudice: Using Ethnic-Sounding Names and Inter-Ethnic Marriages to Identify Labour Market Discrimination," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(1), pages 389-425.
    11. David Neumark, 2018. "Experimental Research on Labor Market Discrimination," Journal of Economic Literature, American Economic Association, vol. 56(3), pages 799-866, September.
    12. Marianne Bertrand & Sendhil Mullainathan, 2004. "Are Emily and Greg More Employable Than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination," American Economic Review, American Economic Association, vol. 94(4), pages 991-1013, September.
    13. Benjamin Edelman & Micahel Luca, 2014. "Digital Discrimination: The Case of Airbnb.com," Harvard Business School Working Papers 14-054, Harvard Business School.
    14. Chaim Fershtman & Uri Gneezy, 2001. "Discrimination in a Segmented Society: An Experimental Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(1), pages 351-377.
    15. Bayer, Patrick & Casey, Marcus & Ferreira, Fernando & McMillan, Robert, 2017. "Racial and ethnic price differentials in the housing market," Journal of Urban Economics, Elsevier, vol. 102(C), pages 91-105.
    16. John Knowles & Nicola Persico & Petra Todd, 2001. "Racial Bias in Motor Vehicle Searches: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 109(1), pages 203-232, February.
    17. Meta Brown & Elizabeth Setren & Giorgio Topa, 2016. "Do Informal Referrals Lead to Better Matches? Evidence from a Firm's Employee Referral System," Journal of Labor Economics, University of Chicago Press, vol. 34(1), pages 161-209.
    18. Kate Antonovics & Peter Arcidiacono & Randall Walsh, 2005. "Games and Discrimination: Lessons From The Weakest Link," Journal of Human Resources, University of Wisconsin Press, vol. 40(4), pages 918-947.
    19. Amanda Pallais & Emily Glassberg Sands, 2016. "Why the Referential Treatment? Evidence from Field Experiments on Referrals," Journal of Political Economy, University of Chicago Press, vol. 124(6), pages 1793-1828.
    20. John J. Horton, 2017. "The Effects of Algorithmic Labor Market Recommendations: Evidence from a Field Experiment," Journal of Labor Economics, University of Chicago Press, vol. 35(2), pages 345-385.
    21. Castillo, Marco & Petrie, Ragan, 2010. "Discrimination in the lab: Does information trump appearance?," Games and Economic Behavior, Elsevier, vol. 68(1), pages 50-59, January.
    22. Agrawal, Ajay & Lacetera, Nicola & Lyons, Elizabeth, 2016. "Does standardized information in online markets disproportionately benefit job applicants from less developed countries?," Journal of International Economics, Elsevier, vol. 103(C), pages 1-12.
    23. Benjamin Edelman & Michael Luca & Dan Svirsky, 2017. "Racial Discrimination in the Sharing Economy: Evidence from a Field Experiment," American Economic Journal: Applied Economics, American Economic Association, vol. 9(2), pages 1-22, April.
    24. Anwar, Shamena, 2012. "Testing for discrimination: Evidence from the game show Street Smarts," Journal of Economic Behavior & Organization, Elsevier, vol. 81(1), pages 268-285.
    25. Chiara Farronato & Andrey Fradkin, 2018. "The Welfare Effects of Peer Entry in the Accommodation Market: The Case of Airbnb," NBER Working Papers 24361, National Bureau of Economic Research, Inc.
    26. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
    27. Philip Oreopoulos, 2011. "Why Do Skilled Immigrants Struggle in the Labor Market? A Field Experiment with Thirteen Thousand Resumes," American Economic Journal: Economic Policy, American Economic Association, vol. 3(4), pages 148-171, November.
    28. David H. Autor & David Scarborough, 2008. "Does Job Testing Harm Minority Workers? Evidence from Retail Establishments," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(1), pages 219-277.
    29. Amanda Pallais, 2014. "Inefficient Hiring in Entry-Level Labor Markets," American Economic Review, American Economic Association, vol. 104(11), pages 3565-3599, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sekou Keita & Thomas Renault & Jérôme Valette, 2024. "The Usual Suspects: Offender Origin, Media Reporting and Natives’ Attitudes Towards Immigration," The Economic Journal, Royal Economic Society, vol. 134(657), pages 322-362.
    2. Brülhart, Marius & Klinke, Gian-Paolo & Marcucci, Andrea & Rohner, Dominic & Thoenig, Mathias, 2023. "Price and Prejudice: Housing Rents Reveal Racial Animus," CEPR Discussion Papers 18050, C.E.P.R. Discussion Papers.
    3. Boto-García, David & Balado-Naves, Roberto & Mayor, Matías & Baños-Pino, José Francisco, 2023. "Consumers' demand for operational licencing: evidence from Airbnb in Paris," Annals of Tourism Research, Elsevier, vol. 100(C).
    4. Simonovits, Gábor & Simonovits, Bori, 2022. "Csökkenthető-e a diszkrimináció a megosztáson alapuló gazdaságban? Egy magyarországi telekocsioldalon végzett kísérleti kutatás eredményei [Can discrimination be decreased in the new platform econo," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 1457-1474.
    5. Chen, Yutong, 2024. "Does the gig economy discriminate against women? Evidence from physicians in China," Journal of Development Economics, Elsevier, vol. 169(C).
    6. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Laouénan, Morgane & Rathelot, Roland, 2017. "Ethnic Discrimination on an Online Marketplace of Vacation Rental," CAGE Online Working Paper Series 318, Competitive Advantage in the Global Economy (CAGE).
    2. Anthony Edo & Nicolas Jacquemet & Constantine Yannelis, 2019. "Language skills and homophilous hiring discrimination: Evidence from gender and racially differentiated applications," Review of Economics of the Household, Springer, vol. 17(1), pages 349-376, March.
    3. Siddique, Abu & Vlassopoulos, Michael & Zenou, Yves, 2023. "Market competition and discrimination," European Economic Review, Elsevier, vol. 152(C).
    4. Carlsson, Magnus & Fumarco, Luca & Rooth, Dan-Olof, 2013. "Artifactual Evidence of Discrimination in Correspondence Studies? A Replication of the Neumark Method," IZA Discussion Papers 7619, Institute of Labor Economics (IZA).
    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. Zenou, Yves & Islam, Asad & Pakrashi, Debayan & Wang, Liang Choon, 2018. "Determining the Extent of Statistical Discrimination: Evidence from a field experiment in India," CEPR Discussion Papers 12955, C.E.P.R. Discussion Papers.
    7. Chowdhury, Shyamal & Ooi, Evarn & Slonim, Robert, 2020. "Racial Discrimination and White First Name Adoption: Evidence from a Correspondence Study in the Australian Labour Market," IZA Discussion Papers 13208, Institute of Labor Economics (IZA).
    8. Mujcic, Redzo & Frijters, Paul, 2013. "Still Not Allowed on the Bus: It Matters If You're Black or White!," IZA Discussion Papers 7300, Institute of Labor Economics (IZA).
    9. Bryson, Alex & Chevalier, Arnaud, 2015. "Is there a taste for racial discrimination amongst employers?," Labour Economics, Elsevier, vol. 34(C), pages 51-63.
    10. Cordoba, Juan C. & Isojärvi, Anni & Li, Haoran, 2020. "Equilibrium Unemployment: The Role Of Discrimination," ISU General Staff Papers 202011140800001116, Iowa State University, Department of Economics.
    11. Tjaden, Jasper Dag & Schwemmer, Carsten & Khadjavi, Menusch, 2018. "Ride with Me - Ethnic Discrimination, Social Markets and the Sharing Economy," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 34(4), pages 418-432.
    12. John M. Nunley & Mark F. Owens & R. Stephen Howard, 2010. "The Effects of Competition and Information on Racial Discrimination: Evidence from a Field Experiment," Working Papers 201007, Middle Tennessee State University, Department of Economics and Finance.
    13. Gaddis, S. Michael, 2018. "An Introduction to Audit Studies in the Social Sciences," SocArXiv e5hfc, Center for Open Science.
    14. Castillo, Marco & Petrie, Ragan, 2010. "Discrimination in the lab: Does information trump appearance?," Games and Economic Behavior, Elsevier, vol. 68(1), pages 50-59, January.
    15. Michael Ewens & Bryan Tomlin & Liang Choon Wang, 2014. "Statistical Discrimination or Prejudice? A Large Sample Field Experiment," The Review of Economics and Statistics, MIT Press, vol. 96(1), pages 119-134, March.
    16. 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.
    17. Tjaden, Jasper Dag & Schwemmer, Carsten & Khadjavi, Menusch, 2017. "Ride with me: Ethnic discrimination in social markets," Kiel Working Papers 2087, Kiel Institute for the World Economy (IfW Kiel).
    18. Eleonora Patacchini & Giuseppe Ragusa & Yves Zenou, 2015. "Unexplored dimensions of discrimination in Europe: homosexuality and physical appearance," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(4), pages 1045-1073, October.
    19. Morten Størling Hedegaard & Jean-Robert Tyran, 2018. "The Price of Prejudice," American Economic Journal: Applied Economics, American Economic Association, vol. 10(1), pages 40-63, January.
    20. David Masclet & Emmanuel Peterle & Sophie Larribeau, 2012. "The Role of Information in Deterring Discrimination: A New Experimental Evidence of Statistical Discrimination," Economics Working Paper Archive (University of Rennes & University of Caen) 201238, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.

    More about this item

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:cesptp:hal-03930675. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.