American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
The Benefits of Revealing Race: Evidence from Minority-Owned Local Businesses
American Economic Review
vol. 115,
no. 2, February 2025
(pp. 660–89)
Abstract
Is there latent demand to support Black-owned businesses? We explore this question by analyzing a new feature that made it easier to identify Black-owned restaurants on an online platform. We find that labeling restaurants as minority-owned increased customer engagement and firm performance, as measured by online traffic, calls, orders, and in-person visits. These effects were more pronounced in areas characterized by greater support for the Democratic Party and lower implicit bias against racial minorities. Labeled restaurants also see an increase in the fraction of reviews that are written by White customers.Citation
Aneja, Abhay, Michael Luca, and Oren Reshef. 2025. "The Benefits of Revealing Race: Evidence from Minority-Owned Local Businesses." American Economic Review 115 (2): 660–89. DOI: 10.1257/aer.20230075Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- J15 Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
- L25 Firm Performance: Size, Diversification, and Scope
- L83 Sports; Gambling; Restaurants; Recreation; Tourism
- L86 Information and Internet Services; Computer Software