Biased Buying

Sellers' skin color affects their online sales.

September/October 2010

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Biased Buying

Courtesy Jennifer Doleac and Luke Stein

Jennifer Doleac and Luke Stein, doctoral candidates in economics, temporarily went into the business of selling iPods last year so they could research the possible influence of race in online shopping decisions. By placing for-sale advertisements on websites used in more than 300 U.S. cities and towns, they compared the responses to ads picturing iPod nanos held by white hands versus identical nanos held by black hands. The ads with the black hands received 17 percent fewer offers—of 2 to 4 percent less money—while getting 13 percent fewer responses.

In the aftermath of the research, which was highlighted by the Freakonomics blog in the New York Times and in other national media, Doleac says she and Stein have been quizzed about whether online shoppers encounter ads showing skin color with meaningful frequency. The latest survey they conducted, notes Doleac, indicated that skin color was evident in 16 percent of the ads for iPod nanos when the product was photographed by the seller (as opposed to an ad with a stock photo).

The major takeaway for Doleac was how intriguing the implications are for "deeper study of how trust is established between buyers and sellers." Other key results included regional distinctions—black sellers were at the greatest disadvantage in the Northeast, for instance—and evidence that black sellers were less disadvantaged in the most competitive ad markets.

Doleac and Stein shipped nanos to every successful bidder and somehow avoided remorseful buyers. One exception: A recipient changed her mind and sent the nano back under the pretext "address not found."

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