Can Information Reduce Ethnic Discrimination? Evidence from Airbnb

We use data from Airbnb to identify the mechanisms underlying discrimination against ethnic minority hosts. Within same neighborhood, hosts groups charge 3.2 percent less for comparable listings. Since ratings provide guests with increasingly rich information about a listing’s quality, we can measure contribution of statistical discrimination, building upon Altonji and Pierret (2001). find that account whole price gap: gaps would disappear if all unobservables were revealed. Also, three-quarters (2.5 points) initial gap be attributed inaccurate beliefs potential hosts’ average group quality. (JEL D83, J15, L84)