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What happened when researchers posted fake iPhone ads online from people in poor neighborhoods

Courtesy of Flickr user <a href="">Luke Ma</a> under a Creative Commons license.
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Let's say you're in the market for an iPhone, used, online. Consider this ad:

I’m selling my black iPhone 5. It’s in great condition and includes all of the original items - head phones, box, charger. It’s never been dropped or scratched.

At $340, it's a good deal, about 10 percent cheaper than what most iPhone 5s are selling for in the D.C. market online. The logistics:

I live in Anacostia and can meet you in Gallery Pl.

Would those last details catch your attention, or sway you in any way onto the next listing? A new study from researchers at NYU suggests that this happens: Fewer would-be buyers are likely to respond to an ad like this when it looks like the seller comes from a low-income neighborhood.

This finding, from research by Max Besbris, Jacob William Faber, Peter Rich and Patrick Sharkey, suggests that the stigma attached to disadvantaged neighborhoods can affect even the ability of people who live there to do a task as small as trying to sell a used phone online. It suggests that where you live in the real world matters online, too — especially if that place evokes negative assumptions about race and class.

We know well that high-poverty neighborhoods entail all kinds of other disadvantages: They often have fewer jobs, worse schools, higher crime and lower quality housing. This study shows that the perception of a neighborhood tied up in all of these problems — the stigma — also follows the people who live there in contexts far from the neighborhood.

"You carry it with you even if you leave your neighborhood and the structural lack of opportunity that might be there," says Rich, a doctoral candidate in sociology at NYU. "It still is with you."

To determine this, Rich and colleagues placed more than 600 similar iPhone ads in an online market in 12 cities over the course of a year (they don't identify the site they used given that most online marketplaces don't include "fake ads for research purposes" in their terms of service). In each city, they posted some ads from a struggling neighborhood and some from a more affluent one: Anacostia and Dupont Circle in D.C., Bed-Stuy and Cobble Hill in Brooklyn, North Lawndale and Lincoln Park in Chicago.

In each case, the seller offered to meet in a neutral location or the buyer's neighborhood. Across all of these cities combined, the researchers found that sellers from struggling neighborhoods got about 16 percent fewer responses from curious buyers in the days after the ad went up. The effect was larger when the poor neighborhood was also a predominantly black one. And among all of these cities, the difference was particularly striking (and statistically significant) in Atlanta:

It's hard to say what exactly potential buyers were thinking here, whether they worried that a used iPhone from a poor neighborhood might be stolen, or if they suspected the seller was less trustworthy, or if they feared meeting that seller in person. The researchers didn't gather any information about the identities of the buyers (many of them may well have been low-income, too). But this kind of audit experiment helps get at how people actually behave rather than just what we say about our preferences and biases.

Buyers may not have been intentionally discriminating against certain people or neighborhoods, any more than white homeowners intentionally discriminate against blacks when they choose to live in largely-white neighborhoods with good schools.

"One of the limitations of that debate in general is it’s focusing on what the intention is of the buyer," Rich says, "when the intentions are not really so important as the lived experience of the people who bear the stigma."

Buyers here may even be making rational decisions about which iPhone to choose in a marketplace with dozens of options. But so many individuals behaving rationally can create a stigma. "That raises to me an interesting dilemma," Rich says, "about how rational actors in a marketplace can reproduce a social inequality."

That this marketplace was online raises even more questions. We like to think that the Internet could be an equalizer, that it can erase distance between communities that are spatially segregated in the real world, that its anonymity can override differences around race or class. The reality, though, is that inequality extends online, too — and that it often exists online in ways that reinforce inequality in the real world.

Researchers at Harvard, for instance, have found that hosts on Airbnb identified in their photos as black don't earn as much for their listings as non-black hosts offering comparable properties. Several years ago, another study from Stanford found that online shoppers were more likely to buy an iPod when the hand holding it in the accompanying image was white instead of black.

This latest study adds evidence that stigma follows people not just when they leave their neighborhoods, but even when they go online — to the one place in theory where real-world location shouldn't matter.