"Race effects on eBay." Ian Ayres, Mahzarin Banaji and Christine Jolls

Race influences how people are treated in subtle – and not-so-subtle – ways. African-Americans are not only more likely to be pulled over by the police, arrested for marijuana use, and incarcerated than whites are. Past studies have shown that African-Americans are also charged more when buying cars, receive fewer letters from their state legislators, and get less extensive medical care.

Now researchers have shown that racial biases also extend to selling things on eBay. In a study published in October by the RAND Journal of Economics, Ian Ayres and Christine Jolls of Yale Law School and Mahzarin Banaji of Harvard looked at how the race of the seller affected 394 auctions of baseball cards on eBay.

Some of the postings were accompanied by a photo of the card held by a light-skinned hand, and some with the card held by a dark-skinned hand, as in the photos above. The study shows that the cards held by an African-American hand sold for around 20 percent less than the cards held by Caucasian sellers.

In addition, 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 effect was also stronger when the baseball card being sold featured a minority player; some bidders placed lower bids for cards depicting African-American players or Hispanic players, all else equal. The researchers also 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 blacker Zip codes.

This paper is unique, according to the researchers, because it's able to zero in on the effects of race specifically. Unlike some previous studies on this kind of discrimination, this one was more closely controlled, in a way that the researcher says will eliminate other sources of bias, such as economic class.

For example, one famous experiment by Marianne Bertrand and Sendhil Mullainathan showed that resumes with white-sounding names, like Greg and Emily, received 50 percent more callbacks for interviews than identical resumes featuring very African-American sounding names, like Lakisha and Jamal.

Though that study presented very strong evidence of employment discrimination, some critics claimed that the findings might reflect other factors beyond a candidates’ race, like socioeconomic status. A paper in 2003 argued that having a very African-American sounding name is in itself a strong indicator of socio-economic status.

The eBay study was designed to rule out these kinds of considerations, with the only clue to the seller’s identity being the hand in the photo.

The researchers say that much of the bias that the study reveals is likely implicit, rather than explicit. Implicit association tests have long shown that white Americans are quicker to associate white faces with more pleasant words and African-American faces with less pleasant words than the reverse, even when the test taker says they are not racially biased.

The difference in the bids also probably results from expectations about other peoples' biases. 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.

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