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The Effects of Race on eBay Auction Pricing

How prejudice drives a decision to deny a job or a loan to minorities.
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(Photo: Alamy Stock Photos)

(Photo: Alamy Stock Photos)

Proving that prejudice drove a decision to deny a job or loan to a minority is difficult. There are always other factors involved, like employment and credit history, that make motivation murky.

But researchers led by Christine Jolls of Yale University found a platform on which they could isolate race from all other considerations: They conducted 394 eBay auctions of baseball cards, with each card photographed being held by either a black or white hand. They report in The RAND Journal of Economics that cards held by African Americans sold for approximately 20 percent less than those in Caucasian hands—in spite of the fact they were, on average, more valuable.

As the researchers note, purported black sellers get penalized "even when there is no opportunity to observe demeanor, socioeconomic status," or any other indicator of personality or trustworthiness. Black skin was sufficient to lower the cards' value. Somewhere, Willie Mays is weeping.

—"Race Effects on eBay," Ayres, I., Banaji, M., and Jolls, C., The RAND Journal of Economics, Vol. 46, No. 4, 2015.