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The Visible Host: Does Race guide Airbnb rental rates in San Francisco?

Kakar, Venoo and Franco, Julisa and Voelz, Joel and Wu, Julia (2016): The Visible Host: Does Race guide Airbnb rental rates in San Francisco?

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Abstract

The surge in Peer to Peer e-commerce has increasingly been characterized by changing the online marketplace to a more personalized environment for the buyer and seller. This personalization involves revealing information on buyer reviews, pictures and biographical information on the sellers to reduce the perceived ``purchase risk" or to facilitate trust with the buyers. However, this personalization has generated possibilities for discrimination in the online marketplace. In this paper, we examine the effect of host information available online (race, gender and sexual orientation etc.) on price listings on Airbnb.com in San Francisco. We find that hispanic hosts and asian hosts, on average, have a 9.6% and 9.3% lower list price relative to their white counterparts, after controlling for neighborhood property values, user reviews and rental unit characteristics. We don't find any significant impact of gender and sexual orientation on price listings. Overall, our findings corroborate the presence of racial discrimination in the online marketplace.

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