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  • 2023
  • Working Paper
  • HBS Working Paper Series

The Benefits of Revealing Race: Evidence from Minority-owned Local Businesses

By: Abhay Aneja, Michael Luca and Oren Reshef
  • Format:Print
  • | Language:English
  • | Pages:73
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Abstract

Is there latent demand to support Black-owned businesses? To explore, we analyze a new feature that made it easier to identify Black-owned restaurants on a large online platform. We find that labeling restaurants as “Black-owned” increased customer engagement and firm performance, as measured by online traffic, calls, orders, and in person visits. These effects are most pronounced in left-leaning areas characterized by lower bias against racial minorities, as measured by regional variation in voting patterns and IAT scores. Restaurants that receive the label also see an increase in the fraction of reviews that are left by White customers.

Keywords

Black-owned Businesses; Race; Prejudice and Bias; Ownership; Knowledge Dissemination; Digital Platforms; Consumer Behavior; Food and Beverage Industry

Citation

Aneja, Abhay, Michael Luca, and Oren Reshef. "The Benefits of Revealing Race: Evidence from Minority-owned Local Businesses." Harvard Business School Working Paper, No. 23-042, January 2023. (Revised September 2023.)
  • SSRN
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More from the Authors
  • Is That What You Really Think?: Book Review of "Third Millennium Thinking" by Saul Perlmutter, John Campbell and Robert MacCoun By: Michael Luca
  • Decision Authority and the Returns to Algorithms By: Hyunjin Kim, Edward L. Glaeser, Andrew Hillis, Scott Duke Kominers and Michael Luca
  • Shanty Real Estate: Sample Classroom Results By: Michael Luca, Jesse M. Shapiro and Nathan Sun
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