It has long been established that racial and ethnic minorities have worse economic outcomes than their non-minority counterparts (Altonji and Pierret, 2001; Bertrand and Mullainathan, 2004; Bertrand and Duflo, 2017; Lang and Manove, 2011). Since Becker (1957), numerous studies have sought to explain the nature and source of these differences (see Lang and Lehmann (2012)). A recent literature explores the impact of detailed information on the persistence of differences between minorities and white users of online marketplaces (Bohren et al., 2019; Cui et al., 2020; Edelman and Luca, 2014; Edelman et al., 2017; Laouénan and Rathelot, 2022). To the best of our knowledge, these analyses are limited to the impact of quantitative reviews, word count of property description and amenities on prices, and ignores the value of qualitative information.

We study the impact of qualitative reviews on short-term rental decisions in an experimental setting. By asking participants to choose between several properties where the ethnic and racial identity of the host is implied (by either the host name or profile picture), we can compare demand by host race in the presence of marginally different review information. The experimental approach, allows us to form detailed conclusions on an agent’s decision making process by changing different components of a property advert. Finally, by combining the demand for properties with decision maker responses from a shortened version of the Harvard Implicit Bias test (performed at a different time to the selection of properties), we can compare the extent of additional information required for the most prejudiced guests to choose a property with racial or ethnic minority hosts.

Motivated by our empirical findings, we develop a model that identifies the varying impact of property information on agent’s willingness to rent from ethnic minority hosts.

The project’s output will contribute to the goals of the Keynes Fund by exploring the impact of racial discrimination in online markets. We aim to shed light on the mechanisms through which discrimination takes place in short-term rental platforms online. In doing so, our results may suggest important margins to consider when designing policies to address racial inequalities in this online market setting, which is becoming increasingly important.