Disentangling the Effects of Race and Place in Economic Transactions: Findings from an Online Field Experiment

Abstract

Scholarship on discrimination consistently shows that non–Whites are at a disadvantage in obtaining goods and services relative to Whites. To a lesser extent, recent work has asked whether or not place of residence may also affect individuals’ chances in economic markets. In this study, we use a field experiment in an online market for second–hand goods to examine transactional opportunities for White, Black, Asian, and Latino residents of both advantaged and disadvantaged neighborhoods. Our results show that sellers prefer transactional partners who live in advantaged neighborhoods to those who live in neighborhoods that are majority non–White and have higher rates of poverty. This was true across all four racial/ethnic groups, revealing that neighborhood stigma exists independently of racial stigma. We discuss the implications for scholarship on neighborhood effects and we outline how future research using experiments can leverage various types of markets to better specify when characteristics like race trigger discrimination.