IDEAS home Printed from https://ideas.repec.org/p/hal/spmain/hal-01514713.html
   My bibliography  Save this paper

Ethnic Discrimination on an Online Marketplace of Vacation Rental

Author

Listed:
  • Morgane Laouenan

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po)

  • Roland Rathelot

    (University of Warwick [Coventry], CEPR - Center for Economic Policy Research)

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.

Suggested Citation

  • Morgane Laouenan & Roland Rathelot, 2017. "Ethnic Discrimination on an Online Marketplace of Vacation Rental," SciencePo Working papers Main hal-01514713, HAL.
    • Handle: RePEc:hal:spmain:hal-01514713
    Note: View the original document on HAL open archive server: https://hal.science/hal-01514713
    as

    Download full text from publisher

    File URL: https://hal.science/hal-01514713/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Joseph G. Altonji & Charles R. Pierret, 2001. "Employer Learning and Statistical Discrimination," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(1), pages 313-350.
    2. Abigail Wozniak, 2015. "Discrimination and the Effects of Drug Testing on Black Employment," The Review of Economics and Statistics, MIT Press, vol. 97(3), pages 548-566, July.
    3. Manuel F. Bagues & Mauro Sylos Labini, 2009. "Do Online Labor Market Intermediaries Matter? The Impact of "AlmaLaurea" on the University-to-Work Transition," NBER Chapters, in: Studies of Labor Market Intermediation, pages 127-154, National Bureau of Economic Research, Inc.
    4. Michael Ewens & Bryan Tomlin & Liang Choon Wang, 2014. "Statistical Discrimination or Prejudice? A Large Sample Field Experiment," The Review of Economics and Statistics, MIT Press, vol. 96(1), pages 119-134, March.
    5. James J. Heckman, 1998. "Detecting Discrimination," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 101-116, Spring.
    6. Levitt, Steven D, 2004. "Testing Theories of Discrimination: Evidence from Weakest Link," Journal of Law and Economics, University of Chicago Press, vol. 47(2), pages 431-452, October.
    7. Patrick Bayer & Marcus D. Casey & Fernando Ferreira & Robert McMillan, 2012. "Estimating Racial Price Differentials in the Housing Market," NBER Working Papers 18069, National Bureau of Economic Research, Inc.
    8. 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.
    9. David H. Autor, 2001. "Wiring the Labor Market," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 25-40, Winter.
    10. Jennifer L. Doleac & Luke C.D. Stein, 2013. "The Visible Hand: Race and Online Market Outcomes," Economic Journal, Royal Economic Society, vol. 123(11), pages 469-492, November.
    11. John Knowles & Nicola Persico & Petra Todd, 2001. "Racial Bias in Motor Vehicle Searches: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 109(1), pages 203-232, February.
    12. Yona Rubinstein & Dror Brenner, 2014. "Pride and Prejudice: Using Ethnic-Sounding Names and Inter-Ethnic Marriages to Identify Labour Market Discrimination," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(1), pages 389-425.
    13. Luc Behaghel & Bruno Crépon & Thomas Le Barbanchon, 2015. "Unintended Effects of Anonymous Résumés," American Economic Journal: Applied Economics, American Economic Association, vol. 7(3), pages 1-27, July.
    14. Luc Behaghel & Bruno Crépon & Thomas Le Barbanchon, 2015. "Unintended Effects of Anonymous," Post-Print halshs-01203070, HAL.
    15. Meta Brown & Elizabeth Setren & Giorgio Topa, 2016. "Do Informal Referrals Lead to Better Matches? Evidence from a Firm's Employee Referral System," Journal of Labor Economics, University of Chicago Press, vol. 34(1), pages 161-209.
    16. Henry S. Farber & Robert Gibbons, 1996. "Learning and Wage Dynamics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(4), pages 1007-1047.
    17. Anwar, Shamena, 2012. "Testing for discrimination: Evidence from the game show Street Smarts," Journal of Economic Behavior & Organization, Elsevier, vol. 81(1), pages 268-285.
    18. David H. Autor & David Scarborough, 2008. "Does Job Testing Harm Minority Workers? Evidence from Retail Establishments," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(1), pages 219-277.
    19. Amanda Pallais, 2014. "Inefficient Hiring in Entry-Level Labor Markets," American Economic Review, American Economic Association, vol. 104(11), pages 3565-3599, November.
    20. Asaf Zussman, 2013. "Ethnic Discrimination: Lessons from the Israeli Online Market for Used Cars," Economic Journal, Royal Economic Society, vol. 123(11), pages 433-468, November.
    21. Amanda Pallais & Emily Glassberg Sands, 2015. "Why the Referential Treatment: Evidence from Field Experiments on Referrals," NBER Working Papers 21357, National Bureau of Economic Research, Inc.
    22. Kevin Lang & Jee-Yeon K. Lehmann, 2012. "Racial Discrimination in the Labor Market: Theory and Empirics," Journal of Economic Literature, American Economic Association, vol. 50(4), pages 959-1006, December.
    23. 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.
    24. Chaim Fershtman & Uri Gneezy, 2001. "Discrimination in a Segmented Society: An Experimental Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(1), pages 351-377.
    25. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, April.
    26. repec:hal:pseose:halshs-01203070 is not listed on IDEAS
    27. Castillo, Marco & Petrie, Ragan, 2010. "Discrimination in the lab: Does information trump appearance?," Games and Economic Behavior, Elsevier, vol. 68(1), pages 50-59, January.
    28. Agrawal, Ajay & Lacetera, Nicola & Lyons, Elizabeth, 2016. "Does standardized information in online markets disproportionately benefit job applicants from less developed countries?," Journal of International Economics, Elsevier, vol. 103(C), pages 1-12.
    29. Kerwin Kofi Charles & Jonathan Guryan, 2008. "Prejudice and Wages: An Empirical Assessment of Becker's The Economics of Discrimination," Journal of Political Economy, University of Chicago Press, vol. 116(5), pages 773-809, October.
    30. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
    31. Philip Oreopoulos, 2011. "Why Do Skilled Immigrants Struggle in the Labor Market? A Field Experiment with Thirteen Thousand Resumes," American Economic Journal: Economic Policy, American Economic Association, vol. 3(4), pages 148-171, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lepage, Louis Pierre, 2021. "Endogenous learning, persistent employer biases, and discrimination," CLEF Working Paper Series 34, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    2. Jean-Benoît Eyméoud & Paul Vertier, 2023. "Gender biases: evidence from a natural experiment in French local elections," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 38(113), pages 3-56.
    3. 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.
    4. repec:hal:spmain:info:hdl:2441/3f39ik5s3j8qapmbpohu7nct0i is not listed on IDEAS
    5. David Neumark, 2018. "Experimental Research on Labor Market Discrimination," Journal of Economic Literature, American Economic Association, vol. 56(3), pages 799-866, September.
    6. Jean-Benoît Eymeoud & Paul Vertier, 2018. "Gender Biases: Evidence from a Natural Experiment in French Local Elections," Post-Print hal-03393139, HAL.
    7. Jean-Benoît Eymeoud & Paul Vertier, 2018. "Gender Biases: Evidence from a Natural Experiment in French Local Elections," Post-Print hal-03393139, HAL.
    8. Herrera, Helios & Glazer, Jacob & Perry, Motty, 2018. "Fake Persuasion," CEPR Discussion Papers 13244, C.E.P.R. Discussion Papers.
    9. Jean-Benoît Eyméoud, 2018. "Housing and discrimination in economics : an empirical approach using Big Data and natural experiments [Logement et discrimination en économie : une approche empirique mêlant expérience naturelle e," SciencePo Working papers Main tel-03419360, HAL.
    10. repec:hal:spmain:info:hdl:2441/3k0m7r593p8gs9njjtpupmlknu is not listed on IDEAS
    11. repec:spo:wpmain:info:hdl:2441/3f39ik5s3j8qapmbpohu7nct0i is not listed on IDEAS
    12. 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.
    13. Jean-Benoît Eyméoud, 2018. "Housing and discrimination in economics : an empirical approach using Big Data and natural experiments [Logement et discrimination en économie : une approche empirique mêlant expérience naturelle e," SciencePo Working papers tel-03419360, HAL.

    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. Anthony Edo & Nicolas Jacquemet & Constantine Yannelis, 2019. "Language skills and homophilous hiring discrimination: Evidence from gender and racially differentiated applications," Review of Economics of the Household, Springer, vol. 17(1), pages 349-376, March.
    2. David Neumark, 2018. "Experimental Research on Labor Market Discrimination," Journal of Economic Literature, American Economic Association, vol. 56(3), pages 799-866, September.
    3. 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).
    4. 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.
    5. 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.
    6. Joanna N. Lahey & Douglas R. Oxley, 2021. "Discrimination at the Intersection of Age, Race, and Gender: Evidence from an Eye‐Tracking Experiment," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 40(4), pages 1083-1119, September.
    7. 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).
    8. Bryson, Alex & Chevalier, Arnaud, 2015. "Is there a taste for racial discrimination amongst employers?," Labour Economics, Elsevier, vol. 34(C), pages 51-63.
    9. Siddique, Abu & Vlassopoulos, Michael & Zenou, Yves, 2023. "Market competition and discrimination," European Economic Review, Elsevier, vol. 152(C).
    10. Marianne Bertrand & Esther Duflo, 2016. "Field Experiments on Discrimination," NBER Working Papers 22014, National Bureau of Economic Research, Inc.
    11. Cordoba, Juan C. & Isojärvi, Anni & Li, Haoran, 2020. "Equilibrium Unemployment: The Role Of Discrimination," ISU General Staff Papers 202011140800001116, Iowa State University, Department of Economics.
    12. Tjaden, Jasper Dag & Schwemmer, Carsten & Khadjavi, Menusch, 2018. "Ride with Me - Ethnic Discrimination, Social Markets and the Sharing Economy," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 34(4), pages 418-432.
    13. Batsaikhan, Mongoljin & Gørtz, Mette & Kennes, John & Lyng, Ran Sun & Monte, Daniel & Tumennasan, Norovsambuu, 2021. "Discrimination and Daycare Choice: Evidence from a Randomized Survey," IZA Discussion Papers 14874, Institute of Labor Economics (IZA).
    14. Michael Ewens & Bryan Tomlin & Liang Choon Wang, 2014. "Statistical Discrimination or Prejudice? A Large Sample Field Experiment," The Review of Economics and Statistics, MIT Press, vol. 96(1), pages 119-134, March.
    15. Marianne Bertrand & Esther Duflo, 2016. "Field Experiments on Discrimination," NBER Working Papers 22014, National Bureau of Economic Research, Inc.
    16. Rich, Judy, 2014. "What Do Field Experiments of Discrimination in Markets Tell Us? A Meta Analysis of Studies Conducted since 2000," IZA Discussion Papers 8584, Institute of Labor Economics (IZA).
    17. Tjaden, Jasper Dag & Schwemmer, Carsten & Khadjavi, Menusch, 2017. "Ride with me: Ethnic discrimination in social markets," Kiel Working Papers 2087, Kiel Institute for the World Economy (IfW Kiel).
    18. Mongoljin Batsaikhan & Mette Gørtz & John Kennes & Ran Sun Lyng & Daniel Monte & Norovsambuu Tumennasan, 2019. "Daycare Choice and Ethnic Diversity: Evidence from a Randomized Survey," Economics Working Papers 2019-02, Department of Economics and Business Economics, Aarhus University.
    19. 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).
    20. David Masclet & Emmanuel Peterle & Sophie Larribeau, 2012. "The Role of Information in Deterring Discrimination: A New Experimental Evidence of Statistical Discrimination," Economics Working Paper Archive (University of Rennes & University of Caen) 201238, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.

    More about this item

    Keywords

    ethnic discrimination; statistical discrimination; rental market;
    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

    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:hal:spmain:hal-01514713. 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: Contact - Sciences Po Departement of Economics (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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.