We use data from Airbnb to identify the mechanisms underlying discrimination against ethnic minority hosts. Within the same neighborhood, hosts from minority groups charge 3.2 percent less for comparable listings. Since ratings provide guests with increasingly rich information about a listing's quality, we can measure the contribution of statistical discrimination, building upon Altonji and Pierret (2001). We find that statistical discrimination can account for the whole ethnic price gap: ethnic gaps would disappear if all unobservables were revealed. Also, three-quarters (2.5 points) of the initial ethnic gap can be attributed to inaccurate beliefs of potential guests about hosts' average group quality.
Laouénan, Morgane, and Roland Rathelot.
"Can Information Reduce Ethnic Discrimination? Evidence from Airbnb."
American Economic Journal: Applied Economics,
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
Personal, Professional, and Business Services