Wednesday, February 26, 2014

Online Marketplaces and Racial Discrimination

 New Harvard research show online marketplaces like Airbnb inadvertently fuel racial discrimination." Analyzing a data set that focuses on New York City (the company's biggest market), the researchers found that black hosts charged approximately 12 percent less for rentals than nonblack hosts—even when the properties were equivalent in terms of location and quality." The research raises some interesting questions on linking your Facebook page to online sites, importance of profile pictures and the placement of these pictures, policies on online marketplaces that might inadvertently promote racial discrimination. 

"But the "pricing" section of the website advises that new hosts set rates with market demand in mind. For example, Airbnb tells new hosts they "may want to charge lower than average rates to attract travelers comparing your place with existing reviews. Once you have a review or two, adjust your rates as needed."
The researchers interpret black hosts' lower prices as evidence of a similar, but permanent, disadvantage. In particular, they maintain that their findings show how black hosts have a harder than average time attracting travelers, and therefore must keep their prices lower than average in order to compete successfully."

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