Racial discrimination is often difficult to prove, with a variety of influencing factors making a clear cut determination often impossible. But it is also widely recognized that racial discrimination is also difficult to eliminate. Now, academic researchers have found yet another way of demonstrating that racial prejudice continues to impact daily lives – often in ways we are unaware of or hadn’t considered. In the 27-page study, published this past winter in the RAND Journal of Economics, Ian Ayres and Christine Jolls of Yale University, and Mahzarin Banaji of Harvard University investigated the impact of a seller’s race in a ﬁeld experiment involving baseball card auctions on eBay. The results, according to the researchers, left little doubt.
In the experiment, photographs posted on eBart showed the cards being held by either a dark-skinned/African-American hand or a light-skinned/Caucasian hand. The study found that cards held by African-American sellers sold for approximately 20 percent ($0.90) less than cards held by Caucasian sellers.
“Our evidence of race differentials is important,” the researchers said, “because the online environment is well controlled (with the absence of confounding tester effects) and because the results show that race effects can persist in a thick real-world market such as eBay.”
They added that the experiment is “well suited to studying and isolating race effects because online bidders have no access to the types of seller information—such as demeanor and socioeconomic background—that are usually observable in ﬁeld experiments examining the effects of race on economic behavior.”
The study, “Race Effects on eBay,” was featured in the Winter 2015 edition of the Journal, and has been referenced in national publications thereafter. The Washington Post reported that “the cards that were held by the African-American hand actually ended up being worth more, suggesting they should have sold for more than the other batch. That is, when the researchers added up how much they had originally paid for all of the cards sold by the black hand versus the white hand, the first total was larger.”
The Post also reported that researchers found that cards sold by the African-American seller to bidders living in Zip codes with a higher proportion of white residents sold for less than those sold to in Zip codes with a larger Black population. In addition, the Post pointed out, “one interesting feature of the study is that, on eBay, the value of the auctioned good is decided in a kind of collective process. Buyers are not just trying to determine how much the good is worth to them; they are also trying to figure out how much everyone else is likely to bid for it. In an eBay auction, buyers can see others’ bids and continue to submit their price until the last minute. In other words, buyers might submit lower bids for the African-American seller not because they personally are biased, but because they expect everyone else to be.”
Christine Jolls (left) is the Gordon Bradford Tweedy Professor at Yale Law School and the Director of the Law and Economics Program at the National Bureau of Economic Research (NBER) with headquarters in Cambridge, Massachusetts. Ian Ayres (center) is a lawyer and an economist. He is the William K. Townsend Professor at Yale Law School, the Anne Urowsky Professorial Fellow in Law, and a Professor at Yale's School of Management. Mahzarin Banaji (right), a psychology professor at Harvard University, studies unconscious thinking and feeling as they unfold in social context, relying on multiple methods including cognitive/affective behavioral measures and neuroimaging (fMRI). Previously, she was Director of Undergraduate Studies at Yale.