The Visible Hand: Race and Online Market Outcomes
24 Pages Posted: 27 Nov 2013
Date Written: November 2013
We examine the effect of race on market outcomes by selling iPods through local online classified advertisements throughout the US. Each advertisement features a photograph including a dark or light‐skinned hand, or one with a wrist tattoo. Black sellers receive fewer and lower offers than white sellers, and the correspondence with black sellers indicates lower levels of trust. Black sellers' outcomes are particularly poor in thin markets (suggesting that discrimination may not ‘survive’ competition among buyers) and those with the most racial isolation and property crime (consistent with channels through which statistical discrimination might operate).
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