Abstract

http://ssrn.com/abstract=1615149
 
 

References (22)



 
 

Citations (2)



 


 



The Visible Hand: Race and Online Market Outcomes


Jennifer L. Doleac


University of Virginia - Frank Batten School of Leadership and Public Policy

Luke C.D. Stein


Arizona State University (ASU) - Finance Department

May 1, 2010


Abstract:     
We examine the effect of race on market outcomes by selling iPods through local online classified advertisements throughout the United States in a year-long field experiment. Each ad features a photograph of the product being held by a dark- or light-skinned (“black” or “white”) hand. To provide context, we also consider a group of sellers against whom buyers might statistically discriminate for similar reasons: white sellers with wrist tattoos. Black sellers do worse than white sellers on a variety of market outcome measures: They receive 13% fewer responses and 17% fewer offers. These effects are strongest in the Northeast, and are similar in magnitude to those associated with the display of a wrist tattoo. Conditional on receiving at least one offer, black sellers also receive 2-4% lower offers, despite the self-selected—and presumably less biased - pool of buyers. In addition, buyers corresponding with black sellers exhibit lower trust: They are 17% less likely to include their name in e-mails, 44% less likely to accept delivery by mail, and 56% more likely to express concern about making a long-distance payment. We find evidence that black sellers suffer particularly poor outcomes in thin markets; it appears that discrimination may not “survive” in the presence of significant competition among buyers. Furthermore, black sellers do worst in the most racially isolated markets and markets with high property crime rates, consistent with channels through which we might expect statistical discrimination to operate.

Number of Pages in PDF File: 49

JEL Classification: J15, J71, C93, L86

working papers series


Download This Paper

Date posted: May 29, 2010 ; Last revised: March 25, 2011

Suggested Citation

Doleac, Jennifer L. and Stein, Luke C.D., The Visible Hand: Race and Online Market Outcomes (May 1, 2010). Available at SSRN: http://ssrn.com/abstract=1615149 or http://dx.doi.org/10.2139/ssrn.1615149

Contact Information

Jennifer L. Doleac (Contact Author)
University of Virginia (UVA) - Frank Batten School of Leadership and Public Policy ( email )
VA
United States
Luke C.D. Stein
Arizona State University (ASU) - Finance Department ( email )
W. P. Carey School of Business
PO Box 873906
Tempe, AZ 85287-3906
United States
480-965-9412 (Phone)
480-965-8539 (Fax)
HOME PAGE: http://www.lukestein.com
Feedback to SSRN


Paper statistics
Abstract Views: 3,406
Downloads: 600
Download Rank: 23,626
References:  22
Citations:  2

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.547 seconds