Inequality and Crowdfunding

Abstract

The advent of crowdfunding brought great optimism about the technological disruption’s capacity to facilitate similarly profound and beneficial economic and social change. Proponents of this optimistic viewpoint argued that crowdfunding could help reduce inequality because it reduces: (a) disparities associated with the search for, and process of gaining access to, funders; and (b) identity constraints and associated biases to the extent that specific facets of one’s identity can be selectively revealed or obscured when raising funds online. Thus it potentially affords access to larger markets or pools of funders with given characteristics and preferences. In this chapter, I take stock of the evidence concerning how, and if so to what extent and why, crowdfunding has had a material bearing on inequality of opportunity associated with gender, race, and geography. While the empirical evidence supports the optimistic case concerning gender, the evidence is mixed with respect to geography, and less encouraging in terms of race.

Keywords: crowdfunding, inequality, gender, race, and geography

JEL Classification: 030, 035, J15, J16, Z13