10.3 Edelmann et al (2017): Racial Discrimination in the Sharing Economy

• Q: Whats the topic of this study?

• Edelman, Luca, and Svirsky (2017): Racial Discrimination in the Sharing Economy: Evidence from a Field Experiment

• What is the research question?
  • General: Is there discrimination on AirBnb?
  • Specific: Are guests with African American names less likely to be accepted than guests with distinctively white names?
• What is the hypothesis?
  • Yes there is. No there isn’t.
• What data do they use?
  • inquire about the availability of roughly 6,400 listings on Airbnb across five cities (6400 messages in July 2015)
  • We create guest accounts that differ by name but are otherwise identical (20 Airbnb accounts). We select two sets of names-one distinctively African American and the other distinctively white
• What is their finding?
  • “applications from guests with distinctively African American names are 16 percent less likely to be accepted relative to identical guests with distinctively white names”
  • “Discrimination occurs among landlords of all sizes, including small landlords sharing the property and larger landlords with multiple properties. It is most pronounced among hosts who have never had an African American guest, suggesting only a subset of hosts discriminate. While rental markets have achieved significant reductions in discrimination in recent decades, our results suggest that Airbnb’s current design choices facilitate discrimination and raise the possibility of erasing some of these civil rights gains.”
  • “Our results are remarkably persistent. Both African American and white hosts discriminate against African American guests; both male and female hosts discriminate; both male and female African American guests are discrimi- nated against. Effects persist both for hosts that offer an entire property and for hosts who share the property with guests. Discrimination persists among experi- enced hosts, including those with multiple properties and those with many reviews. Discrimination persists and is of similar magnitude in high- and low-priced units, in diverse and homogeneous neighborhoods.”
• Q: What struck you about this study? What did you find interesting?
  • What is the cost of discrimination?
  • What about reviews?

• Insight: New technology may recreate long-solved problems (discrimination in the rental market)

References

Edelman, Benjamin, Michael Luca, and Dan Svirsky. 2017. “Racial Discrimination in the Sharing Economy: Evidence from a Field Experiment.” Am. Econ. J. Appl. Econ. 9 (2). aeaweb.org: 1–22.