Digital Discrimination: The Case of Airbnb.com

21 Pages Posted: 11 Jan 2014  

Benjamin G. Edelman

Harvard University - HBS Negotiations, Organizations and Markets Unit

Michael Luca

Harvard Business School - Negotiations, Organizations & Markets Unit

Date Written: January 10, 2014

Abstract

Online marketplaces often contain information not only about products, but also about the people selling the products. In an effort to facilitate trust, many platforms encourage sellers to provide personal profiles and even to post pictures of themselves. However, these features may also facilitate discrimination based on sellers’ race, gender, age, or other aspects of appearance. In this paper, we test for racial discrimination against landlords in the online rental marketplace Airbnb. Using a new data set combining pictures of all New York City landlords on Airbnb with their rental prices and information about quality of the rentals, we show that non-black hosts charge approximately 12% more than black hosts for the equivalent rental. These effects are robust when controlling for all information visible in the Airbnb marketplace. These findings highlight the prevalence of discrimination in online marketplaces, suggesting an important unintended consequence of a seemingly-routine mechanism for building trust.

Suggested Citation

Edelman, Benjamin G. and Luca, Michael, Digital Discrimination: The Case of Airbnb.com (January 10, 2014). Harvard Business School NOM Unit Working Paper No. 14-054. Available at SSRN: https://ssrn.com/abstract=2377353 or http://dx.doi.org/10.2139/ssrn.2377353

Benjamin G. Edelman

Harvard University - HBS Negotiations, Organizations and Markets Unit ( email )

Soldiers Field
Boston, MA 02163
United States

HOME PAGE: http://people.hbs.edu/bedelman

Michael Luca (Contact Author)

Harvard Business School - Negotiations, Organizations & Markets Unit ( email )

Soldiers Field Road
Boston, MA 02163
United States

HOME PAGE: http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=ovr&facId=602417

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