Can Information Reduce Ethnic Discrimination? Evidence from Airbnb
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Abstract
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.Citation
Laouénan, Morgane, and Roland Rathelot. 2022. "Can Information Reduce Ethnic Discrimination? Evidence from Airbnb." American Economic Journal: Applied Economics, 14 (1): 107-32. DOI: 10.1257/app.20190188Additional Materials
JEL Classification
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- J15 Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
- L84 Personal, Professional, and Business Services
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