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The Benefits of Revealing Race: Evidence from Minority-owned Local Businesses

Author

Listed:
  • Abhay Aneja
  • Michael Luca
  • Oren Reshef

Abstract

Is there latent demand to support Black-owned businesses? To explore, we analyze a new feature that made it easier to identify Black-owned restaurants on a large online platform. We find that labeling restaurants as “Black-owned” increased customer engagement and firm performance, as measured by online traffic, calls, orders, and in person visits. These effects are most pronounced in left-leaning areas characterized by lower bias against racial minorities, as measured by regional variation in voting patterns and IAT scores. Restaurants that receive the label also see an increase in the fraction of reviews that are left by White customers.

Suggested Citation

  • Abhay Aneja & Michael Luca & Oren Reshef, 2023. "The Benefits of Revealing Race: Evidence from Minority-owned Local Businesses," NBER Working Papers 30932, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:30932
    Note: IO LE LS POL PR
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    Cited by:

    1. Tan, Eugene & Zeida, Teegawende H., 2024. "Consumer demand and credit supply as barriers to growth for Black-owned startups," Journal of Monetary Economics, Elsevier, vol. 143(C).
    2. Bocar A. Ba & Abdoulaye Ndiaye & Roman G. Rivera & Alexander Whitefield, 2024. "Mispricing Narratives after Social Unrest," Opportunity and Inclusive Growth Institute Working Papers 096, Federal Reserve Bank of Minneapolis.
    3. Bocar A. Ba & Abdoulaye Ndiaye & Roman G. Rivera & Alexander Whitefield, 2024. "Mispricing Narratives after Social Unrest," CESifo Working Paper Series 11264, CESifo.

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    JEL classification:

    • J0 - Labor and Demographic Economics - - General

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