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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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About The Author

Michael Luca

Negotiation, Organizations & Markets
→More Publications

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    • May 2023
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    Gentrification and Retail Churn: Theory and Evidence

    By: Edward L. Glaeser, Michael Luca and Erica Moszkowski
More from the Authors
  • Where Have All the Good Men Gone?: Book Review of 'The Two-Parent Privilege' by Melissa S. Kearney By: Michael Luca
  • Experimenting with Algorithm Resume Screening By: Michael Luca, Jesse M. Shapiro, Adrian Obleton, Evelyn Ramirez and Nathan Sun
  • Gentrification and Retail Churn: Theory and Evidence By: Edward L. Glaeser, Michael Luca and Erica Moszkowski
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