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The Economic Penalty of Terrorism: Increase in Discrimination Against Arabs and Muslims after Paris Attacks

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  • Sander WAGNER

    (CREST, ENSAE, Institut Polytechnique de Paris)

  • Ivaylo D. PETEV

    (CREST, CNRS, Institut Polytechnique de Paris)

Abstract

Economic transactions on online peer-to-peer platforms depend on buyers and sellers revealing personal information to facilitate exchanges with the unintended consequence that the information may become a source for discrimination. Using original panel data we show evidence of substantial discrimination against Arab/Muslim hosts in Airbnb’s online rental market in Paris, France. Analysis of 41-months of online transaction data shows a substantial increase in discrimination following large-scale, deadly terrorist attacks in November 2015. Discrimination results in a foregone monthly revenue of at least 106 US dollars for Arab/Muslim hosts in the year before the November 2015 attacks, after which losses increase to at least 178 US dollars. Our results demonstrate the association of mass terrorism with a contraction of a large-scale market of the sharing economy, the cost of which falls disproportionately upon members of an ethnic and religious minority.

Suggested Citation

  • Sander WAGNER & Ivaylo D. PETEV, 2019. "The Economic Penalty of Terrorism: Increase in Discrimination Against Arabs and Muslims after Paris Attacks," Working Papers 2019-22, Center for Research in Economics and Statistics.
  • Handle: RePEc:crs:wpaper:2019-22
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