A working paper released by two Harvard Business School professors found price discrimination in on-line listings on the Airbnb.com website, which advertises itself as “a trusted community marketplace for people to list, discover, and book unique accommodations around the world.”
According to the study, African Americans who listed housing for rent in New York charged (and received) less than whites advertising comparable housing. Because the site enourages people listing property to rent to post a picture of themselves in their listings (in order to build trust between the users), indivduals looking for unit to rent are usually able to determine the host’s race.
The study’s authors did not find that Airbnb.com itself discriminated against users, and the site alerts users to antidiscrimination laws and states that the site prohibits “content that promotes discrimination, bigotry, racism, hatred, harassment or harm against any individual or group, and we require all users to comply with local laws and regulations.”
According the study’s abstract,
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.
While noting that they do not believe that Airbnb.com is liable for discrimination based on its policies, the study’s authors conclude:
Given Airbnb’s careful consideration of what information is available to guests and hosts, Airbnb might consider eliminating or reducing the prominence of host photos: It is not immediately obvious what beneficial information these photos provide, while they risk facilitating discrimination by guests. Particularly when a guest will be renting an entire property, the guest’s interaction with the host will be quite limited, and we see no real need for Airbnb to highlight the host’s picture.
To read the full working paper, click here.
