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A Discriminating Market

2010 June 6
by Stanley Quan

How present is discrimination in the US today? Maybe higher than you might think.

Check out this interesting discrimination research done by economists Jennifer Doleac and Luke Stein. Here’s a quick summary of what they did:

“Over the course of a year, they placed hundreds of ads in local online markets, randomly altering whether the hand holding an iPod for sale was black, white, or white with a big tattoo.  Here is what they found: Black sellers do worse than white sellers on a variety of market outcome measures: they receive 13% fewer responses and 17% fewer offers. Conditional on receiving at least one offer, black sellers also receive 2–4% lower offers, despite the selfselected—and presumably less biased—pool of buyers. In addition, buyers corresponding with black sellers exhibit lower trust: they are 17% less likely to include their name in e-mails, 44% less likely to accept delivery by mail, and 56% more likely to express concern about making a long-distance payment.”

I think the set-up, a “natural field setting,” is rather creative and produces some real world observations. And boy, do those observations stand out. Racial discrimination, whether we see it plainly or not, is alive and well. This kind of research is what we can’t continue to ignore.


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