London -Shoppers are more likely to buy a product advertised in an online classified advert if they think the seller is white, a new study suggests.
A year-long experiment examining the sales of iPods on Craigslist in the US revealed racial bias, as black sellers did worse than their white counterparts
The research showed that black sellers got fewer responses and lower offers for their iPods, while shoppers were also less attracted to white sellers with tattoos on their wrists.
US researchers posted 1 200 classified adverts in over 300 areas of the US between March 2009 and March 2010, to test for racial bias among buyers by featuring similar photos of the iPod held by a man’s hand that was black, white or white with a wrist tattoo.
The experiment found black sellers receive 13 percent fewer responses, 18 percent fewer offers and the money offered was 12 percent lower than that offered to a white seller.
White sellers with wrist tattoos were found to have similar responses and offers to black sellers.
In the study, published in the Economic Journal of the Royal Economic Society, buyers interacting with black sellers behaved in ways that suggested they trusted them less.
They were 17 percent less likely to include their names, 44 percent less likely to agree to a proposed delivery by mail and 56 percent more likely to express concern about making a long-distance payment.
Professor Jennifer Doleac, assistant professor of public policy and economics at Virginia University, said: “We were really struck to find as much racial discrimination as we did.”
She conducted the study with Luke CD Stein, assistant professor of finance at Arizona State University, when they were both doctoral students in economics at Stanford University.
The researchers placed their adverts among over 300 local classified ad websites with an average of 15.7 other adverts for iPod Nanos listed the previous week.
In more crowded markets, with over 20 iPod adverts, black sellers received the same number of offers and equal best offers relative to white sellers.
But black sellers suffered “particularly poor” outcomes in markets with fewer products on sale, where they received 23 percent fewer offers and best offers were 12 percent lower.
The study also found that black sellers fared worst in markets with high property crime rates and areas with more racially segregated housing, suggesting that at least part of the explanation is “statistical discrimination” – where race is used as a proxy for unobservable negative characteristics – rather than simply “taste-based” discrimination, Doleac explained.
However, “it is also possible that bias against black sellers is higher in high-crime or high-isolation markets,” she said.
The researchers also found evidence that black sellers do better in markets with larger black populations, “suggesting that the disparities may be driven, in part, by buyers’ preference for own-race sellers”, according to the study.
“We believe our study isolates the effect of race on market outcomes more convincingly than previous studies, and provides some insight into why buyers are discriminating,” Doleac said. – Daily Mail