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Sellers on classified ad websites favor buyers from affluent neighborhoods

June 10, 2019

HOUSTON - (June 10, 2019) - New Rice University research has found that people selling stuff on classified ad websites prefer dealing with buyers from affluent neighborhoods.

"Disentangling the Effects of Race and Place in Economic Transactions: Findings from an Online Field Experiment" will appear in an upcoming edition of City and Community.

Max Besbris, an assistant professor of sociology at Rice and the study's lead author, tested whether transactions conducted through online resale websites were affected by the addresses where prospective buyers live. He also studied the role played by race and ethnicity.

"For several decades, social scientists have investigated how the geographic organization of inequality affects social and economic outcomes of those living in disadvantaged places," Besbris said. "We were interested in seeing if this inequality extended to the online resale marketplace."

So Besbris conducted an original field experiment in the market for secondhand goods. Researchers answered advertisements for used cellphones in ways that signaled the prospective buyer's race and ethnicity, as well as whether the buyer lived in an advantaged or disadvantaged neighborhood.

As Besbris hypothesized, inquiries that included the name of a disadvantaged neighborhood received 12% fewer responses than those that referenced an advantaged neighborhood. In addition, those that received responses after claiming they were from disadvantaged neighborhoods were 25% more likely to have a seller suggest an alternate meeting place to complete the transaction.

Sellers were also less likely to respond to inquiries that claimed to be from neighborhoods with a high percentage of black residents than to inquiries from neighborhoods with a high percentage of Latinos. And inquiries that didn't include an address received a nearly identical number of responses as those that indicated they came from a disadvantaged neighborhood.

"This evidence of discrimination or preference based on neighborhood of residence is a crucial contribution to our understanding of how place can shape life outcomes," Besbris said. "What it reveals is that where you live affects all aspects of your life -- even mundane interactions with others."

Besbris and his colleagues conducted the study over 18 months, responding to 2,321 advertisements for used iPhones in 16 U.S. cities. He hopes the research will add to understanding of the wide-ranging effects of segregation and broaden the scope of anti-discrimination policies to include where people live.
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To request a copy of the paper, contact Amy McCaig, senior media relations specialist at Rice, at 713-348-6777 or amym@rice.edu.

This news release can be found online at http://news.rice.edu/.

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Related Materials:

Disentangling the Effects of Race and Place in Economic Transactions: Findings from an Online Field Experiment: https://onlinelibrary.wiley.com/doi/epdf/10.1111/cico.12394

Located on a 300-acre forested campus in Houston, Rice University is consistently ranked among the nation's top 20 universities by U.S. News & World Report. Rice has highly respected schools of Architecture, Business, Continuing Studies, Engineering, Humanities, Music, Natural Sciences and Social Sciences and is home to the Baker Institute for Public Policy. With 3,962 undergraduates and 3,027 graduate students, Rice's undergraduate student-to-faculty ratio is just under 6-to-1. Its residential college system builds close-knit communities and lifelong friendships, just one reason why Rice is ranked No. 1 for lots of race/class interaction and No. 2 for quality of life by the Princeton Review. Rice is also rated as a best value among private universities by Kiplinger's Personal Finance.

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Rice University
Office of Public Affairs / News & Media Relations

David Ruth
713-348-6327
david@rice.edu

Amy McCaig
713-348-6777
amym@rice.edu

Rice University

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