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Ethnic Discrimination on an Online Marketplace of Vacation Rental

Author

Listed:
  • Laouénan, Morgane

    (CNRS, Centre d’Economie de la Sorbonne, Sciences-Po LIEPP)

  • Rathelot, Roland

    (University of Warwick, CEPR, CAGE)

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.Keywords: ethnic discrimination, statistical discrimination, rental market JEL Classification: J15, L85

Suggested Citation

  • 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).
  • Handle: RePEc:cge:wacage:318
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    Cited by:

    1. 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.
    2. Jean-Benoît Eymeoud & Paul Vertier, 2018. "Gender Biases: Evidence from a Natural Experiment in French Local Elections," Working Papers hal-03393139, HAL.
    3. Lepage, Louis Pierre, 2021. "Endogenous learning, persistent employer biases, and discrimination," CLEF Working Paper Series 34, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    4. David Neumark, 2016. "Experimental Research on Labor Market Discrimination," NBER Working Papers 22022, National Bureau of Economic Research, Inc.
    5. Jean-Benoît Eymeoud, 2018. "Housing and Discrimination in Economics: an Empirical Approach using Big Data and Natural Experiments," Sciences Po publications info:hdl:2441/3f39ik5s3j8, Sciences Po.
    6. 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.
    7. Glazer, Jacob & Herrera, Helios & Perry, Motty, 2018. "Fake Persuasion," CEPR Discussion Papers 13244, C.E.P.R. Discussion Papers.
    8. David Neumark, 2018. "Experimental Research on Labor Market Discrimination," Journal of Economic Literature, American Economic Association, vol. 56(3), pages 799-866, September.
    9. Jean-Benoît Eymeoud & Paul Vertier, 2018. "Gender Biases: Evidence from a Natural Experiment in French Local Elections," Sciences Po publications 78, Sciences Po.

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    More about this item

    Keywords

    ethnic discrimination; statistical discrimination; rental market jel classification: j15; l85;
    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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