Black Ownership Matters: Does Revealing Race Increase Demand For Minority-Owned Businesses?

Abstract

Is there consumer demand to support Black-owned businesses? To explore, we investigate the impact of a new feature on a large online platform that made the race of a set of Black business owners salient to customers. We find that this feature substantially increased demand for Black-owned businesses - in the form of more calls to the restaurant, more delivery orders, and - using cell phone data from a different platform - more in person visits to the restaurant. Relative to previous customers, new customers to Black-owned businesses were more likely to be White customers - suggesting demand among White restaurant goers to support Black-owned businesses. Accordingly, the gains for Black-owned businesses were larger in predominately white, Democratic leaning areas, with less racial bias, as measured by implicit association tests.