Michael Luca: "Digital Discrimination: The Case of Airbnb.com"

CRCS Lunch Seminar

Date: Monday, February 24, 2014
Time: 1:00pm – 2:30pm
Place: 60 Oxford Street, Room 330

Speaker: Michael Luca, Assistant Professor of Business Administration, Harvard Business School

Title: Digital Discrimination: The Case of Airbnb.com

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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.com. 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.

The talk is based on the following paper coauthored with Benjamin Edelman: http://bit.ly/1mmoZGf

Bio:

Michael Luca is an assistant professor of business administration in the Negotiation, Organizations, and Markets Unit. He teaches the Negotiations course in the MBA elective curriculum. Professor Luca applies econometric methods to field data in order to study the impact of information in market settings. He investigates the types and features of information disclosure that are most effective, the way in which information disclosure is produced and designed, and how these phenomena affect market structure. In his research, Professor Luca considers rankings, expert reviews, online consumer reviews, and quality disclosure laws. His current work focuses on crowdsourced reviews, analyzing a variety of companies including Yelp, Amazon, and Airbnb. His findings have been written and blogged about in such media outlets as The Wall Street Journal, The New York Times, The Washington Post, The Huffington Post, Chicago Tribune, Harvard Business Review, PC World Magazine, and Salon. Professor Luca received his Ph.D. in economics from Boston University and a bachelor’s degree in economics and mathematics from SUNY Albany. Before beginning his doctoral studies, he worked as a health-care actuary for major insurers.

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