The Visible Hand: Race and Online Market Outcomes
AbstractWe examine the effect of race on market outcomes by selling iPods through local online classified advertisements throughout the United States in a year-long field experiment. Each ad features a photograph of the product being held by a dark- or light-skinned (âblackâ or âwhiteâ) hand. Black sellers do worse than white sellers on a variety of market outcome measures: they receive 13% fewer responses and 17% fewer offers. Conditional on receiving at least one offer, black sellers also receive 2â4% lower offers, despite the selfselectedâand presumably less biasedâpool of buyers. In addition, buyers corresponding with black sellers exhibit lower trust: they are 17% less likely to include their name in e-mails, 44% less likely to accept delivery by mail, and 56% more likely to express concern about making a long-distance payment. We find evidence that black sellers suffer particularly poor outcomes in thin markets; it appears that discrimination may not âsurviveâ in the presence of significant competition among buyers. Furthermore, black sellers do worst in the most racially isolated markets and markets with high property crime rates, suggesting a role for statistical discrimination in explaining the disparity.
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Bibliographic InfoArticle provided by Royal Economic Society in its journal The Economic Journal.
Volume (Year): 123 (2013)
Issue (Month): 11 (November)
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Other versions of this item:
- Jennifer L. Doleac & Luke C.D. Stein, 2010. "The Visible Hand: Race and Online Market Outcomes," Discussion Papers 09-015, Stanford Institute for Economic Policy Research.
- Jennifer L. Doleac & Luke C.D. Stein, 2011. "The Visible Hand: Race and Online Market Outcomes," Discussion Papers 10-025, Stanford Institute for Economic Policy Research.
- J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
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