IDEAS home Printed from https://ideas.repec.org/p/sip/dpaper/10-025.html
   My bibliography  Save this paper

The Visible Hand: Race and Online Market Outcomes

Author

Listed:
  • Jennifer L. Doleac

    (Department of Economics, Stanford University)

  • Luke C.D. Stein

    (Department of Economics, Stanford University)

Abstract

We 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 (“black” or “white”) hand. To provide context, we also consider a group of sellers against whom buyers might statistically discriminate for similar reasons: white sellers with wrist tattoos. Black sellers do worse than white sellers on a variety of market outcome measures: They receive 13% fewer responses and 17% fewer offers. These effects are strongest in the Northeast, and are similar in magnitude to those associated with the display of a wrist tattoo. Conditional on receiving at least one offer, black sellers also receive 2–4% lower offers, despite the selfselected—and presumably less biased—pool 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 “survive” 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, consistent with channels through which we might expect statistical discrimination to operate.

Suggested Citation

  • 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.
  • Handle: RePEc:sip:dpaper:10-025
    as

    Download full text from publisher

    File URL: http://www-siepr.stanford.edu/repec/sip/10-025.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, October.
    2. 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.
    3. Clark Nardinelli & Curtis Simon, 1990. "Customer Racial Discrimination in the Market for Memorabilia: The Case of Baseball," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(3), pages 575-595.
    4. 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.
    5. Ayres, Ian & Siegelman, Peter, 1995. "Race and Gender Discrimination in Bargaining for a New Car," American Economic Review, American Economic Association, vol. 85(3), pages 304-321, June.
    6. 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.
    7. Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259, Elsevier.
    Full references (including those not matched with items on IDEAS)

    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. 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).
    2. John J. Donohue III, 2005. "The Law and Economics of Antidiscrimination Law," NBER Working Papers 11631, National Bureau of Economic Research, Inc.
    3. Bryson, Alex & Chevalier, Arnaud, 2015. "Is there a taste for racial discrimination amongst employers?," Labour Economics, Elsevier, vol. 34(C), pages 51-63.
    4. 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.
    5. 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.
    6. Thomas Haan & Theo Offerman & Randolph Sloof, 2017. "Discrimination in the Labour Market: The Curse of Competition between Workers," Economic Journal, Royal Economic Society, vol. 127(603), pages 1433-1466, August.
    7. Brit Grosskopf & Graeme Pearce, 2020. "Do You Mind Me Paying Less? Measuring Other-Regarding Preferences in the Market for Taxis," Management Science, INFORMS, vol. 66(11), pages 5059-5074, November.
    8. Raymond Fisman & Daniel Paravisini & Vikrant Vig, 2017. "Cultural Proximity and Loan Outcomes," American Economic Review, American Economic Association, vol. 107(2), pages 457-492, February.
    9. Moser, Petra, 2012. "Taste-based discrimination evidence from a shift in ethnic preferences after WWI," Explorations in Economic History, Elsevier, vol. 49(2), pages 167-188.
    10. Ian Ayres & Mahzarin Banaji & Christine Jolls, 2015. "Race effects on eBay," RAND Journal of Economics, RAND Corporation, vol. 46(4), pages 891-917, October.
    11. Roland G. Fryer, Jr. & Devah Pager & Jörg L. Spenkuch, 2013. "Racial Disparities in Job Finding and Offered Wages," Journal of Law and Economics, University of Chicago Press, vol. 56(3), pages 633-689.
    12. 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).
    13. Ronald Cummings & Paul Ferraro, 2005. "Cultural diversity, discrimination and economic outcomes: An experimental analysis," Artefactual Field Experiments 00045, The Field Experiments Website.
    14. John M. Nunley & Adam Pugh & Nicholas Romero & Richard Alan Seals, Jr., 2014. "An Examination of Racial Discrimination in the Labor Market for Recent College Graduates: Estimates from the Field," Auburn Economics Working Paper Series auwp2014-06, Department of Economics, Auburn University.
    15. Vojtech Bartos & Michal Bauer & Julie Chytilova & Filip Matejka, 2013. "Attention Discrimination: Theory and Field Experiments," CERGE-EI Working Papers wp499, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    16. Sarah Marx Quintanar, 2017. "Man vs. machine: An investigation of speeding ticket disparities based on gender and race," Journal of Applied Economics, Universidad del CEMA, vol. 20, pages 1-28, May.
    17. 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).
    18. 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.
    19. Ritwik Banerjee & Nabanita Datta Gupta, 2015. "Awareness Programs and Change in Taste-Based Caste Prejudice," PLOS ONE, Public Library of Science, vol. 10(4), pages 1-17, April.
    20. Aksoy, Billur & Chadd, Ian & Koh, Boon Han, 2023. "Sexual identity, gender, and anticipated discrimination in prosocial behavior," European Economic Review, Elsevier, vol. 154(C).

    More about this item

    Keywords

    race; advertising;

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

    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:sip:dpaper:10-025. 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: Anne Shor (email available below). General contact details of provider: https://edirc.repec.org/data/cestaus.html .

    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.