Online marketplaces that allow people to peddle a place to stay or a ride in their car have been disruptive, creating communities of small sellers. But what if measures intended to foster trust between buyers and sellers online—such as sharing a photo of the seller—actually cause people to discriminate against one another based on unconscious bias?
In a new study posted online and now under review for publication, Harvard Business School economists analyzed listings from New York City on the popular online rental marketplace Airbnb.com and found that black hosts consistently charge less than non-black hosts, even when controlling for factors such as location and apartment quality. The authors interpret the difference—non-black hosts charged 12 percent more for equivalent rentals—as an indication of discrimination because pricing reflects what hosts are able to charge; lower prices reflect lower demand.
In research they have not yet published, the team also contacted hundreds of hosts using stereotypically white or black names, seeking a place to rent. They found that hosts were far more likely to respond to renters seeking rooms named “Greg,” for example, than “Jamal.”
“There are 50 years of history of trying to reduce discrimination in housing and education,” Luca said. “Companies build marketplaces that could either encourage or discourage discrimination and you’d like to see companies held to the fire a little bit. They can encourage trust in the marketplace, but don’t almost explicitly encourage discrimination by making hosts and guests feel like they need to upload their photos.”
In a statement, an Airbnb.com spokesman questioned the findings:
“We are committed to making Airbnb the most open, trusted, diverse, transparent community in the world and our Terms of Service prohibit content that discriminates. The data in this report is nearly two years old and is from only one of the more than 35,000 cities where Airbnb hosts welcome guests into their homes. Additionally, the authors made a number of subjective or inaccurate determinations when compiling their findings.”
The spokesman noted that prices are often linked to the number of reviews of the apartments, a factor not taken into account by the paper, which examined only the overall ratings. He also pointed out that the hosts choose how much to charge.
Despite the real questions the company has raised about the study, dozens of studies have arrived at the same depressing conclusion: we all carry unconscious prejudices and biases with us that may lead us to discriminate against other people, even when we don’t want to.
-- In another study, scientists asked to review applicants for a laboratory manager position were given identical resumes with either a male or female name at the top. Regardless of their own gender, scientists rated the male applicant as more competent and said, on average, he should be paid $4,000 more than the equivalent woman applicant.
-- The simple use of blinded orchestra auditions, in which the participant tries out behind a screen, is credited with increasing the number of women in symphony orchestras. One study found that the use of a screen increased the chances a woman would advance from preliminary rounds by 50 percent and would significantly influence whether a woman would win a position.
The Internet is often perceived as a medium that can decrease discrimination; after all, it strips interactions of many of the factors that could lead to prejudice. But it’s important to remember that the way systems are built can—even when not itself racist or biased—lead to discrimination. For example, an MIT professor last year found that typing traditional African-American names into Google more often led to links for criminal records probes than typing white names.
Luca said he doesn’t believe the companies or the people buying things online are intentionally racist. That’s all the more reason that forethought should be given to the design of marketplaces and the way that decisions about what to include on a profile could play on people’s unconscious biases.
Mahzarin Banaji, a psychology professor at Harvard University and author of the book “Blindspot: Hidden Biases of Good People”, said that a good business practice would be to keep the profile photo out of view when people were browsing property listings.
“Important as this study is, it is hardly alone,” Banaji wrote in an e-mail. “There are thousands of studies showing that a person’s social group influences decisions about them. When assessments of competence and trust are involved, they directly influence life opportunities, including financial remuneration.”