Since the advent of online shopping, people have taken great luxury in purchasing desirable items without ever having to walk into a store or deal with a sales representative. However, could it be possible that something as petty as skin color or body art can influence your online purchases? A study led by Professor Jennifer Doleac with the University of Virginia found that online shoppers are less likely to buy a product if its model is black or has a tattoo.
“The environment in which we conducted our experiment has many advantages. Buyers have no reason to make offers that they do not anticipate ending in a transaction,” Professor Doleac reported. “Trust also plays a key role in the interactions — the buyer expects to meet a seller to complete the transaction and faces the real possibility of deception or theft.”
Professor Doleac and her colleagues used pictures of an iPod that was either held by a dark-skinned hand, a light-skinned hand, or a light-skinned wrist with a tattoo. From March 2009 to March 2010, the research team posted 1,200 online classified advertisements promoting the sale of iPods in 300 local and countrywide markets. Around 18 percent of the ads used in the study were posted to markets with at least 20 other advertisements.
Online shoppers responded to the ad with the black seller 13 percent fewer times than the white seller and gave 18 percent fewer offers for the iPod. Shoppers were also 17 percent less likely to include their name with their purchase, 44 percent less likely to agree to delivery by mail and 56 percent more likely to complain about a long-distance payment, all telltale signs that the shopper did not trust the seller. The results for black sellers were equivalent to those for the white seller with a tattoo on his wrist.
“These are characteristics of many ‘real-world’ market transactions that are not present in the markets considered by many other studies,” Professor Doleac added. “We believe our research isolates the effect of race on market outcomes more convincingly than previous studies and provides some insight into why buyers are discriminating.”
The research team also noted that in markets with at least 20 other iPod advertisements, considered a “thicker market,” black sellers recorded the same amount of offers as white sellers. On the other hand, in markets with considerably fewer buyers and sellers, “thin markets,” black sellers received 23 percent fewer offers, similar to sellers with a tattoo.
Source: Doleac J, Stein L. “The Visible Hand: Race and Online Market Outcomes.” Economic Journal. 2013.